Correlation Between Sabre Insurance and Ross Stores

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

Diversification Opportunities for Sabre Insurance and Ross Stores

-0.58

Correlation Coefficient

Sabre Insurance  Ross Stores

Excellent diversification

The 3 months correlation between Sabre and Ross is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Ross Stores go up and down completely randomly.

Pair Corralation between Sabre Insurance and Ross Stores

Assuming the 90 days horizon Sabre Insurance Group is expected to generate 0.91 times more return on investment than Ross Stores. However, Sabre Insurance Group is 1.1 times less risky than Ross Stores. It trades about 0.13 of its potential returns per unit of risk. Ross Stores is currently generating about -0.04 per unit of risk. If you would invest  146.00  in Sabre Insurance Group on April 20, 2025 and sell it today you would earn a total of  27.00  from holding Sabre Insurance Group or generate 18.49% 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.  Ross Stores

Sabre Insurance Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sabre Insurance Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sabre Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Ross Stores

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Sabre Insurance Group and Ross Stores 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.