Correlation Between ICC Holdings and Sabre Insurance

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

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

Diversification Opportunities for ICC Holdings and Sabre Insurance

0.0

Correlation Coefficient

ICC Holdings  Sabre Insurance

Pay attention - limited upside

The 3 months correlation between ICC and Sabre is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings 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 ICC Holdings 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 ICC Holdings 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 ICC Holdings i.e., ICC Holdings and Sabre Insurance go up and down completely randomly.

Pair Corralation between ICC Holdings and Sabre Insurance

Given the investment horizon of 90 days ICC Holdings is expected to generate 242.4 times more return on investment than Sabre Insurance. However, ICC Holdings is 242.4 times more volatile than Sabre Insurance Group. It trades about 0.07 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.09 per unit of risk. If you would invest  1,586  in ICC Holdings on December 5, 2024 and sell it today you would earn a total of  706.00  from holding ICC Holdings or generate 44.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	89.82%
Values	Daily Returns

ICC Holdings  vs.  Sabre Insurance Group

ICC Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, ICC Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Sabre Insurance Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sabre Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Sabre Insurance is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ICC Holdings and Sabre Insurance

The main advantage of trading using opposite ICC Holdings and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC Holdings 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 ICC Holdings 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.