Correlation Between Metals Exploration and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Metals Exploration 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 Metals Exploration and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Exploration Plc and Sabre Insurance Group, you can compare the effects of market volatilities on Metals Exploration 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 Metals Exploration with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Sabre Insurance.
Diversification Opportunities for Metals Exploration and Sabre Insurance
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metals and Sabre is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc 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 Metals Exploration 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 Metals Exploration Plc 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 Metals Exploration i.e., Metals Exploration and Sabre Insurance go up and down completely randomly.
Pair Corralation between Metals Exploration and Sabre Insurance
Assuming the 90 days trading horizon Metals Exploration Plc is expected to under-perform the Sabre Insurance. In addition to that, Metals Exploration is 1.83 times more volatile than Sabre Insurance Group. It trades about -0.12 of its total potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.13 per unit of volatility. If you would invest 13,180 in Sabre Insurance Group on September 24, 2024 and sell it today you would earn a total of 600.00 from holding Sabre Insurance Group or generate 4.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Metals Exploration Plc vs. Sabre Insurance Group
Performance |
Timeline |
Metals Exploration Plc |
Sabre Insurance Group |
Metals Exploration and Sabre Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Metals Exploration and Sabre Insurance
The main advantage of trading using opposite Metals Exploration and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration 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.Metals Exploration vs. Cairo Communication SpA | Metals Exploration vs. Morgan Advanced Materials | Metals Exploration vs. Taiwan Semiconductor Manufacturing | Metals Exploration vs. Martin Marietta Materials |
Sabre Insurance vs. European Metals Holdings | Sabre Insurance vs. Metals Exploration Plc | Sabre Insurance vs. Cornish Metals | Sabre Insurance vs. Panther Metals PLC |
Check out your portfolio center.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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