Correlation Between Despegar Corp and Sabre

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

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

Diversification Opportunities for Despegar Corp and Sabre

0.0

Correlation Coefficient

Despegar Corp  Sabre

Pay attention - limited upside

The 3 months correlation between Despegar and Sabre is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Despegar Corp and Sabre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre and Despegar Corp 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 Despegar Corp are associated (or correlated) with Sabre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre has no effect on the direction of Despegar Corp i.e., Despegar Corp and Sabre go up and down completely randomly.

Pair Corralation between Despegar Corp and Sabre

If you would invest (100.00) in Sabre on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Sabre or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Despegar Corp  vs.  Sabre

Despegar Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Despegar Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Despegar Corp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Sabre

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sabre has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Sabre is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Despegar Corp and Sabre

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

The idea behind Despegar Corp and Sabre 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..