Correlation Between Sabre Insurance and MyHealthChecked Plc

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

Diversification Opportunities for Sabre Insurance and MyHealthChecked Plc

-0.09

Correlation Coefficient

Sabre Insurance  MyHealthChecked Plc

Good diversification

The 3 months correlation between Sabre and MyHealthChecked is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and MyHealthChecked Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MyHealthChecked 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 MyHealthChecked Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MyHealthChecked Plc has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and MyHealthChecked Plc go up and down completely randomly.

Pair Corralation between Sabre Insurance and MyHealthChecked Plc

Assuming the 90 days trading horizon Sabre Insurance Group is expected to under-perform the MyHealthChecked Plc. But the stock apears to be less risky and, when comparing its historical volatility, Sabre Insurance Group is 4.86 times less risky than MyHealthChecked Plc. The stock trades about -0.05 of its potential returns per unit of risk. The MyHealthChecked Plc is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  1,250  in MyHealthChecked Plc on October 26, 2024 and sell it today you would earn a total of  600.00  from holding MyHealthChecked Plc or generate 48.0% 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.  MyHealthChecked Plc

Sabre Insurance Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sabre Insurance Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sabre Insurance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

MyHealthChecked Plc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MyHealthChecked Plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, MyHealthChecked Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sabre Insurance and MyHealthChecked Plc

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

The idea behind Sabre Insurance Group and MyHealthChecked Plc 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.