Correlation Between Impax Asset and Sabre Insurance

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

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

Diversification Opportunities for Impax Asset and Sabre Insurance

0.44

Correlation Coefficient

Impax Asset  Sabre Insurance

Very weak diversification

The 3 months correlation between Impax and Sabre is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management 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 Impax Asset 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 Impax Asset Management 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 Impax Asset i.e., Impax Asset and Sabre Insurance go up and down completely randomly.

Pair Corralation between Impax Asset and Sabre Insurance

Assuming the 90 days trading horizon Impax Asset Management is expected to under-perform the Sabre Insurance. In addition to that, Impax Asset is 2.19 times more volatile than Sabre Insurance Group. It trades about -0.17 of its total potential returns per unit of risk. Sabre Insurance Group is currently generating about -0.03 per unit of volatility. If you would invest  14,580  in Sabre Insurance Group on September 20, 2024 and sell it today you would lose (640.00) from holding Sabre Insurance Group or give up 4.39% of portfolio value over 90 days.

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

Impax Asset Management  vs.  Sabre Insurance Group

Impax Asset Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impax Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Impax Asset and Sabre Insurance

The main advantage of trading using opposite Impax Asset and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset 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 Impax Asset Management 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.