Correlation Between Sabre Insurance and McEwen Mining

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

Diversification Opportunities for Sabre Insurance and McEwen Mining

0.09

Correlation Coefficient

Sabre Insurance  McEwen Mining

Significant diversification

The 3 months correlation between Sabre and McEwen is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen Mining 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and McEwen Mining go up and down completely randomly.

Pair Corralation between Sabre Insurance and McEwen Mining

Assuming the 90 days trading horizon Sabre Insurance Group is expected to under-perform the McEwen Mining. But the stock apears to be less risky and, when comparing its historical volatility, Sabre Insurance Group is 1.73 times less risky than McEwen Mining. The stock trades about -0.12 of its potential returns per unit of risk. The McEwen Mining is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  844.00  in McEwen Mining on September 3, 2024 and sell it today you would lose (9.00) from holding McEwen Mining or give up 1.07% of portfolio value over 90 days.

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

Sabre Insurance Group  vs.  McEwen Mining

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

McEwen Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days McEwen Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, McEwen Mining 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 Sabre Insurance and McEwen Mining

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

The idea behind Sabre Insurance Group and McEwen Mining 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.