Correlation Between Sparebank and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Sparebank 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 Sparebank and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SR and Sabre Insurance Group, you can compare the effects of market volatilities on Sparebank 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 Sparebank with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Sabre Insurance.
Diversification Opportunities for Sparebank and Sabre Insurance
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sparebank and Sabre is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR 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 Sparebank 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 Sparebank 1 SR 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 Sparebank i.e., Sparebank and Sabre Insurance go up and down completely randomly.
Pair Corralation between Sparebank and Sabre Insurance
Assuming the 90 days trading horizon Sparebank 1 SR is expected to under-perform the Sabre Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Sparebank 1 SR is 1.52 times less risky than Sabre Insurance. The stock trades about -0.1 of its potential returns per unit of risk. The Sabre Insurance Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 13,180 in Sabre Insurance Group on September 25, 2024 and sell it today you would earn a total of 600.00 from holding Sabre Insurance Group or generate 4.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sparebank 1 SR vs. Sabre Insurance Group
Performance |
Timeline |
Sparebank 1 SR |
Sabre Insurance Group |
Sparebank and Sabre Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sparebank and Sabre Insurance
The main advantage of trading using opposite Sparebank and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank 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.Sparebank vs. Uniper SE | Sparebank vs. Mulberry Group PLC | Sparebank vs. London Security Plc | Sparebank vs. Triad Group PLC |
Sabre Insurance vs. Griffin Mining | Sabre Insurance vs. Anglesey Mining | Sabre Insurance vs. Blackrock World Mining | Sabre Insurance vs. Caledonia Mining |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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