Correlation Between Sabre Insurance and Monarch Services

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

Diversification Opportunities for Sabre Insurance and Monarch Services

1.0

Correlation Coefficient

Sabre Insurance  Monarch Services

No risk reduction

The 3 months correlation between Sabre and Monarch is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Monarch Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monarch Services 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 Monarch Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monarch Services has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Monarch Services go up and down completely randomly.

Pair Corralation between Sabre Insurance and Monarch Services

If you would invest  0.02  in Monarch Services on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Monarch Services or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

Sabre Insurance Group  vs.  Monarch Services

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

Monarch Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monarch Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Monarch Services is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Sabre Insurance and Monarch Services

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

The idea behind Sabre Insurance Group and Monarch Services 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.