Correlation Between Sabre Insurance and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Alfa Financial 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 Alfa Financial 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 Alfa Financial Software, you can compare the effects of market volatilities on Sabre Insurance and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Alfa Financial.
Diversification Opportunities for Sabre Insurance and Alfa Financial
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sabre and Alfa is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Alfa Financial go up and down completely randomly.
Pair Corralation between Sabre Insurance and Alfa Financial
Assuming the 90 days trading horizon Sabre Insurance Group is expected to under-perform the Alfa Financial. But the stock apears to be less risky and, when comparing its historical volatility, Sabre Insurance Group is 1.19 times less risky than Alfa Financial. The stock trades about -0.07 of its potential returns per unit of risk. The Alfa Financial Software is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 19,600 in Alfa Financial Software on September 3, 2024 and sell it today you would earn a total of 2,450 from holding Alfa Financial Software or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. Alfa Financial Software
Performance |
| Timeline |
| Sabre Insurance Group |
| Alfa Financial Software |
Sabre Insurance and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Alfa Financial
The main advantage of trading using opposite Sabre Insurance and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| Sabre Insurance vs. McEwen Mining | Sabre Insurance vs. United Internet AG | Sabre Insurance vs. Universal Display Corp | Sabre Insurance vs. GoldMining |
| Alfa Financial vs. Samsung Electronics Co | Alfa Financial vs. Samsung Electronics Co | Alfa Financial vs. Hyundai Motor | Alfa Financial 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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