Correlation Between Sabre Insurance and NORFOLK

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

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

Diversification Opportunities for Sabre Insurance and NORFOLK

0.0

Correlation Coefficient

Sabre Insurance  NORFOLK

Pay attention - limited upside

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

Pair Corralation between Sabre Insurance and NORFOLK

If you would invest  495.00  in Sabre Insurance Group on September 29, 2024 and sell it today you would earn a total of  9.00  from holding Sabre Insurance Group or generate 1.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.79%
Values	Daily Returns

Sabre Insurance Group  vs.  NORFOLK SOUTHN P

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 latest stock price disturbance, may contribute to short-term losses for the investors.

NORFOLK SOUTHN P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NORFOLK SOUTHN P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for NORFOLK SOUTHN P investors.

Pair Trading with Sabre Insurance and NORFOLK

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

The idea behind Sabre Insurance Group and NORFOLK SOUTHN P 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.