Correlation Between Sabre Insurance and Eco Oil
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Eco Oil 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 Eco Oil 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 Eco Oil Gas, you can compare the effects of market volatilities on Sabre Insurance and Eco Oil 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 Eco Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Eco Oil.
Diversification Opportunities for Sabre Insurance and Eco Oil
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sabre and Eco is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Eco Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Oil Gas 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 Eco Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Oil Gas has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Eco Oil go up and down completely randomly.
Pair Corralation between Sabre Insurance and Eco Oil
Assuming the 90 days trading horizon Sabre Insurance Group is expected to under-perform the Eco Oil. But the stock apears to be less risky and, when comparing its historical volatility, Sabre Insurance Group is 2.2 times less risky than Eco Oil. The stock trades about -0.11 of its potential returns per unit of risk. The Eco Oil Gas is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Eco Oil Gas on October 21, 2024 and sell it today you would earn a total of 63.00 from holding Eco Oil Gas or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. Eco Oil Gas
Performance |
| Timeline |
| Sabre Insurance Group |
| Eco Oil Gas |
Sabre Insurance and Eco Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Eco Oil
The main advantage of trading using opposite Sabre Insurance and Eco Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Eco Oil 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 Eco Oil will offset losses from the drop in Eco Oil's long position.| Sabre Insurance vs. Berkshire Hathaway | Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Chocoladefabriken Lindt Spruengli |
| Eco Oil vs. Zoom Video Communications | Eco Oil vs. Enbridge | Eco Oil vs. Endo International PLC | Eco Oil vs. Somero Enterprise |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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