Correlation Between Zegona Communications and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Sabre Insurance 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 Zegona Communications and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zegona Communications Plc and Sabre Insurance Group, you can compare the effects of market volatilities on Zegona Communications and Sabre Insurance 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 Zegona Communications with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Sabre Insurance.
Diversification Opportunities for Zegona Communications and Sabre Insurance
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zegona and Sabre is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Sabre Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Insurance Group and Zegona Communications 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 Zegona Communications Plc are associated (or correlated) with Sabre Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Insurance Group has no effect on the direction of Zegona Communications i.e., Zegona Communications and Sabre Insurance go up and down completely randomly.
Pair Corralation between Zegona Communications and Sabre Insurance
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 2.15 times more return on investment than Sabre Insurance. However, Zegona Communications is 2.15 times more volatile than Sabre Insurance Group. It trades about 0.27 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about -0.13 per unit of risk. If you would invest 42,400 in Zegona Communications Plc on November 8, 2024 and sell it today you would earn a total of 7,400 from holding Zegona Communications Plc or generate 17.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zegona Communications Plc vs. Sabre Insurance Group
Performance |
| Timeline |
| Zegona Communications Plc |
| Sabre Insurance Group |
Zegona Communications and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Sabre Insurance
The main advantage of trading using opposite Zegona Communications and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Sabre Insurance 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 Insurance will offset losses from the drop in Sabre Insurance's long position.| Zegona Communications vs. Coeur Mining | Zegona Communications vs. Lundin Mining Corp | Zegona Communications vs. Capital Drilling | Zegona Communications vs. Ecclesiastical Insurance Office |
| Sabre Insurance vs. LPKF Laser Electronics | Sabre Insurance vs. Liontrust Asset Management | Sabre Insurance vs. New Residential Investment | Sabre Insurance vs. The Mercantile Investment |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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