Correlation Between Pharol SGPS and Sabre Insurance

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

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

Diversification Opportunities for Pharol SGPS and Sabre Insurance

0.0

Correlation Coefficient

Pharol SGPS  Sabre Insurance

Pay attention - limited upside

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

Pair Corralation between Pharol SGPS and Sabre Insurance

If you would invest  504.00  in Sabre Insurance Group on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Sabre Insurance Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Pharol SGPS SA  vs.  Sabre Insurance Group

Pharol SGPS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pharol SGPS SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company 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. In spite of fairly strong technical and fundamental indicators, Sabre Insurance is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pharol SGPS and Sabre Insurance

The main advantage of trading using opposite Pharol SGPS and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pharol SGPS 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 Pharol SGPS SA 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.