Correlation Between Top Glove and Sabre Corpo
Can any of the company-specific risk be diversified away by investing in both Top Glove and Sabre Corpo 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 Top Glove and Sabre Corpo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Glove and Sabre Corpo, you can compare the effects of market volatilities on Top Glove and Sabre Corpo 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 Top Glove with a short position of Sabre Corpo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Glove and Sabre Corpo.
Diversification Opportunities for Top Glove and Sabre Corpo
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Top and Sabre is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Top Glove and Sabre Corpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Corpo and Top Glove 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 Top Glove are associated (or correlated) with Sabre Corpo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Corpo has no effect on the direction of Top Glove i.e., Top Glove and Sabre Corpo go up and down completely randomly.
Pair Corralation between Top Glove and Sabre Corpo
Assuming the 90 days horizon Top Glove is expected to generate 2.3 times more return on investment than Sabre Corpo. However, Top Glove is 2.3 times more volatile than Sabre Corpo. It trades about 0.05 of its potential returns per unit of risk. Sabre Corpo is currently generating about 0.03 per unit of risk. If you would invest 24.00 in Top Glove on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Top Glove or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Top Glove vs. Sabre Corpo
Performance |
| Timeline |
| Top Glove |
| Sabre Corpo |
Top Glove and Sabre Corpo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Glove and Sabre Corpo
The main advantage of trading using opposite Top Glove and Sabre Corpo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Glove position performs unexpectedly, Sabre Corpo 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 Sabre Corpo will offset losses from the drop in Sabre Corpo's long position.| Top Glove vs. Deluxe | Top Glove vs. Cimpress NV | Top Glove vs. BOS Better Online | Top Glove vs. WiMi Hologram Cloud |
| Sabre Corpo vs. Expedia Group | Sabre Corpo vs. Trip Group Ltd | Sabre Corpo vs. Booking Holdings | Sabre Corpo vs. Despegar 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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