Correlation Between Sabre Insurance and Bloomsbury Publishing
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Bloomsbury Publishing 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 Bloomsbury Publishing 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 Bloomsbury Publishing Plc, you can compare the effects of market volatilities on Sabre Insurance and Bloomsbury Publishing 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 Bloomsbury Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Bloomsbury Publishing.
Diversification Opportunities for Sabre Insurance and Bloomsbury Publishing
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sabre and Bloomsbury is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Bloomsbury Publishing Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomsbury Publishing Plc 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 Bloomsbury Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomsbury Publishing Plc has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Bloomsbury Publishing go up and down completely randomly.
Pair Corralation between Sabre Insurance and Bloomsbury Publishing
Assuming the 90 days trading horizon Sabre Insurance Group is expected to under-perform the Bloomsbury Publishing. But the stock apears to be less risky and, when comparing its historical volatility, Sabre Insurance Group is 1.15 times less risky than Bloomsbury Publishing. The stock trades about -0.01 of its potential returns per unit of risk. The Bloomsbury Publishing Plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 38,803 in Bloomsbury Publishing Plc on September 12, 2024 and sell it today you would earn a total of 27,397 from holding Bloomsbury Publishing Plc or generate 70.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sabre Insurance Group vs. Bloomsbury Publishing Plc
Performance |
Timeline |
Sabre Insurance Group |
Bloomsbury Publishing Plc |
Sabre Insurance and Bloomsbury Publishing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sabre Insurance and Bloomsbury Publishing
The main advantage of trading using opposite Sabre Insurance and Bloomsbury Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Bloomsbury Publishing 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 Bloomsbury Publishing will offset losses from the drop in Bloomsbury Publishing's long position.Sabre Insurance vs. Bloomsbury Publishing Plc | Sabre Insurance vs. Molson Coors Beverage | Sabre Insurance vs. METALL ZUG AG | Sabre Insurance vs. Associated British Foods |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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