Correlation Between Sabre Insurance and Anglesey Mining

Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Anglesey Mining 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 Anglesey Mining 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 Anglesey Mining, you can compare the effects of market volatilities on Sabre Insurance and Anglesey Mining 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 Anglesey Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Anglesey Mining.

Diversification Opportunities for Sabre Insurance and Anglesey Mining

-0.55

Correlation Coefficient

Sabre Insurance  Anglesey Mining

Excellent diversification

The 3 months correlation between Sabre and Anglesey is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Anglesey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey Mining 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 Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Anglesey Mining go up and down completely randomly.

Pair Corralation between Sabre Insurance and Anglesey Mining

Assuming the 90 days trading horizon Sabre Insurance Group is expected to under-perform the Anglesey Mining. But the stock apears to be less risky and, when comparing its historical volatility, Sabre Insurance Group is 4.01 times less risky than Anglesey Mining. The stock trades about -0.09 of its potential returns per unit of risk. The Anglesey Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  73.00  in Anglesey Mining on December 25, 2024 and sell it today you would earn a total of  12.00  from holding Anglesey Mining or generate 16.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Sabre Insurance Group  vs.  Anglesey Mining

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 latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Anglesey Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anglesey Mining are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Anglesey Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sabre Insurance and Anglesey Mining

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

The idea behind Sabre Insurance Group and Anglesey Mining 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.