Correlation Between Sabre Insurance and Grieg Seafood

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

Diversification Opportunities for Sabre Insurance and Grieg Seafood

-0.51

Correlation Coefficient

Sabre Insurance  Grieg Seafood

Excellent diversification

The 3 months correlation between Sabre and Grieg is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Grieg Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grieg Seafood 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 Grieg Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grieg Seafood has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Grieg Seafood go up and down completely randomly.

Pair Corralation between Sabre Insurance and Grieg Seafood

Assuming the 90 days trading horizon Sabre Insurance Group is expected to under-perform the Grieg Seafood. But the stock apears to be less risky and, when comparing its historical volatility, Sabre Insurance Group is 1.23 times less risky than Grieg Seafood. The stock trades about -0.02 of its potential returns per unit of risk. The Grieg Seafood is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5,625  in Grieg Seafood on September 21, 2024 and sell it today you would earn a total of  410.00  from holding Grieg Seafood or generate 7.29% return on investment over 90 days.

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

Sabre Insurance Group  vs.  Grieg Seafood

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.

Grieg Seafood

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grieg Seafood are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Grieg Seafood may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sabre Insurance and Grieg Seafood

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

The idea behind Sabre Insurance Group and Grieg Seafood 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.