Correlation Between Sabre Insurance and Metals Exploration
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Metals Exploration 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 Metals Exploration 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 Metals Exploration Plc, you can compare the effects of market volatilities on Sabre Insurance and Metals Exploration 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 Metals Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Metals Exploration.
Diversification Opportunities for Sabre Insurance and Metals Exploration
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sabre and Metals is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Metals Exploration Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Exploration Plc 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 Metals Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Exploration Plc has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Metals Exploration go up and down completely randomly.
Pair Corralation between Sabre Insurance and Metals Exploration
Assuming the 90 days trading horizon Sabre Insurance is expected to generate 26.32 times less return on investment than Metals Exploration. But when comparing it to its historical volatility, Sabre Insurance Group is 2.26 times less risky than Metals Exploration. It trades about 0.01 of its potential returns per unit of risk. Metals Exploration Plc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 170.00 in Metals Exploration Plc on September 2, 2024 and sell it today you would earn a total of 400.00 from holding Metals Exploration Plc or generate 235.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. Metals Exploration Plc
Performance |
| Timeline |
| Sabre Insurance Group |
| Metals Exploration Plc |
Sabre Insurance and Metals Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Metals Exploration
The main advantage of trading using opposite Sabre Insurance and Metals Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Metals Exploration 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 Metals Exploration will offset losses from the drop in Metals Exploration's long position.| Sabre Insurance vs. Berkshire Hathaway | Sabre Insurance vs. Hyundai Motor | Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Samsung Electronics Co |
| Metals Exploration vs. Bankers Investment Trust | Metals Exploration vs. New Residential Investment | Metals Exploration vs. Oakley Capital Investments | Metals Exploration vs. Sydbank |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |