Correlation Between FC Investment and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both FC Investment 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 FC Investment and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Sabre Insurance Group, you can compare the effects of market volatilities on FC Investment 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 FC Investment with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Sabre Insurance.
Diversification Opportunities for FC Investment and Sabre Insurance
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FCIT and Sabre is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust 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 FC Investment 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 FC Investment Trust 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 FC Investment i.e., FC Investment and Sabre Insurance go up and down completely randomly.
Pair Corralation between FC Investment and Sabre Insurance
Assuming the 90 days trading horizon FC Investment is expected to generate 3.33 times less return on investment than Sabre Insurance. But when comparing it to its historical volatility, FC Investment Trust is 2.09 times less risky than Sabre Insurance. It trades about 0.04 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,090 in Sabre Insurance Group on June 18, 2024 and sell it today you would earn a total of 5,330 from holding Sabre Insurance Group or generate 58.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.6% |
Values | Daily Returns |
FC Investment Trust vs. Sabre Insurance Group
Performance |
Timeline |
FC Investment Trust |
Sabre Insurance Group |
FC Investment and Sabre Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FC Investment and Sabre Insurance
The main advantage of trading using opposite FC Investment and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment 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.FC Investment vs. Samsung Electronics Co | FC Investment vs. Samsung Electronics Co | FC Investment vs. Hyundai Motor | FC Investment vs. Toyota Motor Corp |
Sabre Insurance vs. Hyundai Motor | Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Samsung Electronics Co | Sabre Insurance vs. Chocoladefabriken Lindt Spruengli |
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 CEOs Directory module to screen CEOs from public companies around the world.
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