Correlation Between Sabre Insurance and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and PPHE Hotel 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 PPHE Hotel 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 PPHE Hotel Group, you can compare the effects of market volatilities on Sabre Insurance and PPHE Hotel 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 PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and PPHE Hotel.
Diversification Opportunities for Sabre Insurance and PPHE Hotel
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sabre and PPHE is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group 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 PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and PPHE Hotel go up and down completely randomly.
Pair Corralation between Sabre Insurance and PPHE Hotel
Assuming the 90 days trading horizon Sabre Insurance Group is expected to under-perform the PPHE Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Sabre Insurance Group is 1.41 times less risky than PPHE Hotel. The stock trades about -0.16 of its potential returns per unit of risk. The PPHE Hotel Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 130,500 in PPHE Hotel Group on October 10, 2024 and sell it today you would earn a total of 3,500 from holding PPHE Hotel Group or generate 2.68% 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. PPHE Hotel Group
Performance |
| Timeline |
| Sabre Insurance Group |
| PPHE Hotel Group |
Sabre Insurance and PPHE Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and PPHE Hotel
The main advantage of trading using opposite Sabre Insurance and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's long position.| Sabre Insurance vs. Roebuck Food Group | Sabre Insurance vs. Tyson Foods Cl | Sabre Insurance vs. Dalata Hotel Group | Sabre Insurance vs. Erste Group Bank |
| PPHE Hotel vs. Bell Food Group | PPHE Hotel vs. Axfood AB | PPHE Hotel vs. Chrysalis Investments | PPHE Hotel 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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