Correlation Between Sabre Insurance and Shionogi

Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Shionogi 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 Shionogi 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 Shionogi Co, you can compare the effects of market volatilities on Sabre Insurance and Shionogi 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 Shionogi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Shionogi.

Diversification Opportunities for Sabre Insurance and Shionogi

0.26

Correlation Coefficient

Sabre Insurance  Shionogi

Modest diversification

The 3 months correlation between Sabre and Shionogi is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Shionogi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shionogi 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 Shionogi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shionogi has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Shionogi go up and down completely randomly.

Pair Corralation between Sabre Insurance and Shionogi

Assuming the 90 days horizon Sabre Insurance Group is expected to generate 1.4 times more return on investment than Shionogi. However, Sabre Insurance is 1.4 times more volatile than Shionogi Co. It trades about 0.05 of its potential returns per unit of risk. Shionogi Co is currently generating about 0.0 per unit of risk. If you would invest  107.00  in Sabre Insurance Group on October 21, 2024 and sell it today you would earn a total of  50.00  from holding Sabre Insurance Group or generate 46.73% 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.  Shionogi Co

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. Despite nearly stable basic indicators, Sabre Insurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Shionogi

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shionogi Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Shionogi may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sabre Insurance and Shionogi

The main advantage of trading using opposite Sabre Insurance and Shionogi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Shionogi 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 Shionogi will offset losses from the drop in Shionogi's long position.

The idea behind Sabre Insurance Group and Shionogi Co 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.