Correlation Between SUN ART and Sabre Insurance

Can any of the company-specific risk be diversified away by investing in both SUN ART and Sabre Insurance 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 SUN ART and Sabre Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SUN ART RETAIL and Sabre Insurance Group, you can compare the effects of market volatilities on SUN ART and Sabre Insurance 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 SUN ART with a short position of Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN ART and Sabre Insurance.

Diversification Opportunities for SUN ART and Sabre Insurance

0.43

Correlation Coefficient

SUN ART  Sabre Insurance

Very weak diversification

The 3 months correlation between SUN and Sabre is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SUN ART RETAIL and Sabre Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Insurance Group and SUN ART 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 SUN ART RETAIL are associated (or correlated) with Sabre Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Insurance Group has no effect on the direction of SUN ART i.e., SUN ART and Sabre Insurance go up and down completely randomly.

Pair Corralation between SUN ART and Sabre Insurance

Assuming the 90 days trading horizon SUN ART is expected to generate 1.03 times less return on investment than Sabre Insurance. In addition to that, SUN ART is 1.64 times more volatile than Sabre Insurance Group. It trades about 0.08 of its total potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.13 per unit of volatility. If you would invest  146.00  in Sabre Insurance Group on April 19, 2025 and sell it today you would earn a total of  26.00  from holding Sabre Insurance Group or generate 17.81% return on investment over 90 days.

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

SUN ART RETAIL  vs.  Sabre Insurance Group

SUN ART RETAIL

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SUN ART RETAIL are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, SUN ART exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with SUN ART and Sabre Insurance

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

The idea behind SUN ART RETAIL and Sabre Insurance Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.