Correlation Between Sabre Insurance and Chrysalis Investments
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments, you can compare the effects of market volatilities on Sabre Insurance and Chrysalis Investments 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 Chrysalis Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Chrysalis Investments.
Diversification Opportunities for Sabre Insurance and Chrysalis Investments
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sabre and Chrysalis is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Chrysalis Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chrysalis Investments 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 Chrysalis Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chrysalis Investments has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Chrysalis Investments go up and down completely randomly.
Pair Corralation between Sabre Insurance and Chrysalis Investments
Assuming the 90 days trading horizon Sabre Insurance is expected to generate 3.25 times less return on investment than Chrysalis Investments. In addition to that, Sabre Insurance is 1.19 times more volatile than Chrysalis Investments. It trades about 0.02 of its total potential returns per unit of risk. Chrysalis Investments is currently generating about 0.09 per unit of volatility. If you would invest 9,000 in Chrysalis Investments on October 24, 2024 and sell it today you would earn a total of 690.00 from holding Chrysalis Investments or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. Chrysalis Investments
Performance |
| Timeline |
| Sabre Insurance Group |
| Chrysalis Investments |
Sabre Insurance and Chrysalis Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Chrysalis Investments
The main advantage of trading using opposite Sabre Insurance and Chrysalis Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Chrysalis Investments 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 Chrysalis Investments will offset losses from the drop in Chrysalis Investments' long position.| Sabre Insurance vs. Monks Investment Trust | Sabre Insurance vs. New Residential Investment | Sabre Insurance vs. Associated British Foods | Sabre Insurance vs. Fevertree Drinks Plc |
| Chrysalis Investments vs. New Residential Investment | Chrysalis Investments vs. Diversified Energy | Chrysalis Investments vs. Sabre Insurance Group | Chrysalis Investments vs. Zurich Insurance Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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