Correlation Between Sabre Corpo and International Business
Can any of the company-specific risk be diversified away by investing in both Sabre Corpo and International Business 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 Corpo and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabre Corpo and International Business Machines, you can compare the effects of market volatilities on Sabre Corpo and International Business 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 Corpo with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Corpo and International Business.
Diversification Opportunities for Sabre Corpo and International Business
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sabre and International is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Corpo and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and Sabre Corpo 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 Corpo are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Sabre Corpo i.e., Sabre Corpo and International Business go up and down completely randomly.
Pair Corralation between Sabre Corpo and International Business
Given the investment horizon of 90 days Sabre Corpo is expected to under-perform the International Business. In addition to that, Sabre Corpo is 2.85 times more volatile than International Business Machines. It trades about -0.13 of its total potential returns per unit of risk. International Business Machines is currently generating about 0.1 per unit of volatility. If you would invest 16,533 in International Business Machines on January 18, 2024 and sell it today you would earn a total of 1,777 from holding International Business Machines or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Corpo vs. International Business Machine
Performance |
| Timeline |
| Sabre Corpo |
| International Business |
Sabre Corpo and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Corpo and International Business
The main advantage of trading using opposite Sabre Corpo and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Corpo position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Sabre Corpo vs. Expedia Group | Sabre Corpo vs. Trip Group Ltd | Sabre Corpo vs. Booking Holdings | Sabre Corpo vs. Despegar Corp |
| International Business vs. EPAM Systems | International Business vs. Infosys Ltd ADR | International Business vs. Cognizant Technology Solutions | International Business vs. FiscalNote Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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