Correlation Between Odyssean Investment and Sabre Insurance

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

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

Diversification Opportunities for Odyssean Investment and Sabre Insurance

0.92

Correlation Coefficient

Odyssean Investment  Sabre Insurance

Almost no diversification

The 3 months correlation between Odyssean and Sabre is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Odyssean Investment Trust 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 Odyssean Investment 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 Odyssean Investment Trust 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 Odyssean Investment i.e., Odyssean Investment and Sabre Insurance go up and down completely randomly.

Pair Corralation between Odyssean Investment and Sabre Insurance

Assuming the 90 days trading horizon Odyssean Investment Trust is expected to generate 0.86 times more return on investment than Sabre Insurance. However, Odyssean Investment Trust is 1.16 times less risky than Sabre Insurance. It trades about -0.11 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about -0.13 per unit of risk. If you would invest  17,350  in Odyssean Investment Trust on September 5, 2024 and sell it today you would lose (1,900) from holding Odyssean Investment Trust or give up 10.95% of portfolio value over 90 days.

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

Odyssean Investment Trust  vs.  Sabre Insurance Group

Odyssean Investment Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Odyssean Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Odyssean Investment and Sabre Insurance

The main advantage of trading using opposite Odyssean Investment and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odyssean Investment 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 Odyssean Investment Trust 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.