Correlation Between Sabre Insurance and One Media

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

Diversification Opportunities for Sabre Insurance and One Media

0.46

Correlation Coefficient

Sabre Insurance  One Media

Very weak diversification

The 3 months correlation between Sabre and One is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP 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 One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and One Media go up and down completely randomly.

Pair Corralation between Sabre Insurance and One Media

Assuming the 90 days trading horizon Sabre Insurance Group is expected to under-perform the One Media. But the stock apears to be less risky and, when comparing its historical volatility, Sabre Insurance Group is 1.74 times less risky than One Media. The stock trades about -0.01 of its potential returns per unit of risk. The One Media iP is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  419.00  in One Media iP on October 2, 2024 and sell it today you would earn a total of  6.00  from holding One Media iP or generate 1.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Sabre Insurance Group  vs.  One Media iP

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 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.

One Media iP

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in One Media iP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, One Media is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sabre Insurance and One Media

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

The idea behind Sabre Insurance Group and One Media iP 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.