Correlation Between NURAN WIRELESS and Sabre Insurance

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

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

Diversification Opportunities for NURAN WIRELESS and Sabre Insurance

0.32

Correlation Coefficient

NURAN WIRELESS  Sabre Insurance

Weak diversification

The 3 months correlation between NURAN and Sabre is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding NURAN WIRELESS INC 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 NURAN WIRELESS 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 NURAN WIRELESS INC 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 NURAN WIRELESS i.e., NURAN WIRELESS and Sabre Insurance go up and down completely randomly.

Pair Corralation between NURAN WIRELESS and Sabre Insurance

Assuming the 90 days trading horizon NURAN WIRELESS INC is expected to under-perform the Sabre Insurance. In addition to that, NURAN WIRELESS is 1.95 times more volatile than Sabre Insurance Group. It trades about -0.03 of its total potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.09 per unit of volatility. If you would invest  160.00  in Sabre Insurance Group on September 27, 2024 and sell it today you would earn a total of  10.00  from holding Sabre Insurance Group or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

NURAN WIRELESS INC  vs.  Sabre Insurance Group

NURAN WIRELESS INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NURAN WIRELESS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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.

Pair Trading with NURAN WIRELESS and Sabre Insurance

The main advantage of trading using opposite NURAN WIRELESS and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NURAN WIRELESS 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 NURAN WIRELESS INC 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.