Correlation Between COMINTL BANK and Sabre Insurance

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

By analyzing existing cross correlation between COMINTL BANK ADR1 and Sabre Insurance Group, you can compare the effects of market volatilities on COMINTL BANK 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 COMINTL BANK with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMINTL BANK and Sabre Insurance.

Diversification Opportunities for COMINTL BANK and Sabre Insurance

0.14

Correlation Coefficient

COMINTL BANK  Sabre Insurance

Average diversification

The 3 months correlation between COMINTL and Sabre is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding COMINTL BANK ADR1 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 COMINTL BANK 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 COMINTL BANK ADR1 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 COMINTL BANK i.e., COMINTL BANK and Sabre Insurance go up and down completely randomly.

Pair Corralation between COMINTL BANK and Sabre Insurance

Assuming the 90 days trading horizon COMINTL BANK is expected to generate 2.39 times less return on investment than Sabre Insurance. But when comparing it to its historical volatility, COMINTL BANK ADR1 is 1.33 times less risky than Sabre Insurance. It trades about 0.09 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  155.00  in Sabre Insurance Group on October 4, 2024 and sell it today you would earn a total of  9.00  from holding Sabre Insurance Group or generate 5.81% return on investment over 90 days.

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

COMINTL BANK ADR1  vs.  Sabre Insurance Group

COMINTL BANK ADR1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COMINTL BANK ADR1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, COMINTL BANK is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the 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 COMINTL BANK and Sabre Insurance

The main advantage of trading using opposite COMINTL BANK and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMINTL BANK 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 COMINTL BANK ADR1 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.