Correlation Between Sabre Corpo and Microsoft
Can any of the company-specific risk be diversified away by investing in both Sabre Corpo and Microsoft 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 Microsoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabre Corpo and Microsoft, you can compare the effects of market volatilities on Sabre Corpo and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Corpo and Microsoft.
Diversification Opportunities for Sabre Corpo and Microsoft
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sabre and Microsoft is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Corpo and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Sabre Corpo i.e., Sabre Corpo and Microsoft go up and down completely randomly.
Pair Corralation between Sabre Corpo and Microsoft
Given the investment horizon of 90 days Sabre Corpo is expected to generate 3.76 times more return on investment than Microsoft. However, Sabre Corpo is 3.76 times more volatile than Microsoft. It trades about 0.31 of its potential returns per unit of risk. Microsoft is currently generating about -0.19 per unit of risk. If you would invest 203.00 in Sabre Corpo on January 19, 2024 and sell it today you would earn a total of 54.00 from holding Sabre Corpo or generate 26.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Corpo vs. Microsoft
Performance |
| Timeline |
| Sabre Corpo |
| Microsoft |
Sabre Corpo and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Corpo and Microsoft
The main advantage of trading using opposite Sabre Corpo and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Corpo position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| Sabre Corpo vs. Expedia Group | Sabre Corpo vs. Trip Group Ltd | Sabre Corpo vs. Booking Holdings | Sabre Corpo vs. Despegar Corp |
| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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