Correlation Between Cembra Money and Sabre Insurance

Can any of the company-specific risk be diversified away by investing in both Cembra Money 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 Cembra Money and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cembra Money Bank and Sabre Insurance Group, you can compare the effects of market volatilities on Cembra Money 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 Cembra Money with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and Sabre Insurance.

Diversification Opportunities for Cembra Money and Sabre Insurance

-0.27

Correlation Coefficient

Cembra Money  Sabre Insurance

Very good diversification

The 3 months correlation between Cembra and Sabre is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank 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 Cembra Money 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 Cembra Money Bank 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 Cembra Money i.e., Cembra Money and Sabre Insurance go up and down completely randomly.

Pair Corralation between Cembra Money and Sabre Insurance

Assuming the 90 days trading horizon Cembra Money is expected to generate 5.58 times less return on investment than Sabre Insurance. But when comparing it to its historical volatility, Cembra Money Bank is 1.37 times less risky than Sabre Insurance. It trades about 0.06 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  12,900  in Sabre Insurance Group on September 21, 2024 and sell it today you would earn a total of  1,140  from holding Sabre Insurance Group or generate 8.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cembra Money Bank  vs.  Sabre Insurance Group

Cembra Money Bank

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cembra Money Bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cembra Money is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Sabre Insurance Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sabre Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sabre Insurance is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cembra Money and Sabre Insurance

The main advantage of trading using opposite Cembra Money and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money 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.

The idea behind Cembra Money Bank and Sabre Insurance Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.