Correlation Between Sabre Insurance and Sparebank
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Sparebank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sabre Insurance and Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabre Insurance Group and Sparebank 1 SR, you can compare the effects of market volatilities on Sabre Insurance and Sparebank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sabre Insurance with a short position of Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Sparebank.
Diversification Opportunities for Sabre Insurance and Sparebank
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sabre and Sparebank is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR and Sabre Insurance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sabre Insurance Group are associated (or correlated) with Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 SR has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Sparebank go up and down completely randomly.
Pair Corralation between Sabre Insurance and Sparebank
Assuming the 90 days trading horizon Sabre Insurance Group is expected to generate 2.01 times more return on investment than Sparebank. However, Sabre Insurance is 2.01 times more volatile than Sparebank 1 SR. It trades about 0.0 of its potential returns per unit of risk. Sparebank 1 SR is currently generating about -0.13 per unit of risk. If you would invest 13,200 in Sabre Insurance Group on August 29, 2024 and sell it today you would lose (60.00) from holding Sabre Insurance Group or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. Sparebank 1 SR
Performance |
| Timeline |
| Sabre Insurance Group |
| Sparebank 1 SR |
Sabre Insurance and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Sparebank
The main advantage of trading using opposite Sabre Insurance and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Sparebank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sparebank will offset losses from the drop in Sparebank's long position.| Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Hyundai Motor | Sabre Insurance vs. Toyota Motor Corp |
| Sparebank vs. Samsung Electronics Co | Sparebank vs. Samsung Electronics Co | Sparebank vs. Hyundai Motor | Sparebank vs. Toyota Motor Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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