Correlation Between VCI Global and Sabre Corpo

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

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

Diversification Opportunities for VCI Global and Sabre Corpo

-0.43

Correlation Coefficient

VCI Global  Sabre Corpo

Very good diversification

The 3 months correlation between VCI and Sabre is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and Sabre Corpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Corpo and VCI Global 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 VCI Global Limited are associated (or correlated) with Sabre Corpo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Corpo has no effect on the direction of VCI Global i.e., VCI Global and Sabre Corpo go up and down completely randomly.

Pair Corralation between VCI Global and Sabre Corpo

Given the investment horizon of 90 days VCI Global Limited is expected to generate 9.18 times more return on investment than Sabre Corpo. However, VCI Global is 9.18 times more volatile than Sabre Corpo. It trades about 0.08 of its potential returns per unit of risk. Sabre Corpo is currently generating about 0.01 per unit of risk. If you would invest  182.00  in VCI Global Limited on September 26, 2024 and sell it today you would lose (16.00) from holding VCI Global Limited or give up 8.79% of portfolio value over 90 days.

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

VCI Global Limited  vs.  Sabre Corpo

VCI Global Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VCI Global Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sabre Corpo

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sabre Corpo are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, Sabre Corpo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VCI Global and Sabre Corpo

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

The idea behind VCI Global Limited and Sabre Corpo 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.