Correlation Between Royal Caribbean and Sabre

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

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

Diversification Opportunities for Royal Caribbean and Sabre

0.0

Correlation Coefficient

Royal Caribbean  Sabre

Pay attention - limited upside

The 3 months correlation between Royal and Sabre is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Royal Caribbean Cruises and Sabre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre and Royal Caribbean 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 Royal Caribbean Cruises are associated (or correlated) with Sabre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre has no effect on the direction of Royal Caribbean i.e., Royal Caribbean and Sabre go up and down completely randomly.

Pair Corralation between Royal Caribbean and Sabre

If you would invest (100.00) in Sabre on January 8, 2025 and sell it today you would earn a total of  100.00  from holding Sabre or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Royal Caribbean Cruises  vs.  Sabre

Royal Caribbean Cruises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Royal Caribbean Cruises has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Sabre

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sabre has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Sabre is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Royal Caribbean and Sabre

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

The idea behind Royal Caribbean Cruises and Sabre 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.