Correlation Between Argo Group and Sabre Corpo

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

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

Diversification Opportunities for Argo Group and Sabre Corpo

0.1

Correlation Coefficient

Argo Group  Sabre Corpo

Average diversification

The 3 months correlation between Argo and Sabre is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group International and Sabre Corpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Corpo and Argo Group 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 Argo Group International are associated (or correlated) with Sabre Corpo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Corpo has no effect on the direction of Argo Group i.e., Argo Group and Sabre Corpo go up and down completely randomly.

Pair Corralation between Argo Group and Sabre Corpo

Assuming the 90 days trading horizon Argo Group International is expected to generate 0.03 times more return on investment than Sabre Corpo. However, Argo Group International is 32.87 times less risky than Sabre Corpo. It trades about 0.24 of its potential returns per unit of risk. Sabre Corpo is currently generating about -0.04 per unit of risk. If you would invest  2,455  in Argo Group International on December 29, 2024 and sell it today you would earn a total of  47.00  from holding Argo Group International or generate 1.91% return on investment over 90 days.

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

Argo Group International  vs.  Sabre Corpo

Argo Group International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Argo Group International are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Argo Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Sabre Corpo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sabre Corpo has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Argo Group and Sabre Corpo

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

The idea behind Argo Group International and Sabre Corpo 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.