Correlation Between CHEVRON and Sabre Insurance

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

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

Diversification Opportunities for CHEVRON and Sabre Insurance

0.0

Correlation Coefficient

CHEVRON  Sabre Insurance

Pay attention - limited upside

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

Pair Corralation between CHEVRON and Sabre Insurance

If you would invest  9,921  in CHEVRON P on December 4, 2024 and sell it today you would earn a total of  1.00  from holding CHEVRON P or generate 0.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CHEVRON P  vs.  Sabre Insurance Group

CHEVRON P

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CHEVRON P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CHEVRON is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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 fairly strong technical and fundamental indicators, Sabre Insurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CHEVRON and Sabre Insurance

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

The idea behind CHEVRON P and Sabre Insurance Group 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.