Correlation Between Sabio Holdings and Brambles

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

By analyzing existing cross correlation between Sabio Holdings and Brambles Ltd ADR, you can compare the effects of market volatilities on Sabio Holdings and Brambles 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 Sabio Holdings with a short position of Brambles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabio Holdings and Brambles.

Diversification Opportunities for Sabio Holdings and Brambles

-0.75

Correlation Coefficient

Sabio Holdings  Brambles

Pay attention - limited upside

The 3 months correlation between Sabio and Brambles is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sabio Holdings and Brambles Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brambles ADR and Sabio Holdings 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 Sabio Holdings are associated (or correlated) with Brambles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brambles ADR has no effect on the direction of Sabio Holdings i.e., Sabio Holdings and Brambles go up and down completely randomly.

Pair Corralation between Sabio Holdings and Brambles

Assuming the 90 days horizon Sabio Holdings is expected to under-perform the Brambles. In addition to that, Sabio Holdings is 3.56 times more volatile than Brambles Ltd ADR. It trades about -0.08 of its total potential returns per unit of risk. Brambles Ltd ADR is currently generating about 0.16 per unit of volatility. If you would invest  2,726  in Brambles Ltd ADR on May 6, 2025 and sell it today you would earn a total of  323.00  from holding Brambles Ltd ADR or generate 11.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Sabio Holdings  vs.  Brambles Ltd ADR

Sabio Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sabio Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Brambles ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brambles Ltd ADR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent essential indicators, Brambles may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Sabio Holdings and Brambles

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

The idea behind Sabio Holdings and Brambles Ltd ADR 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.