Correlation Between InfuSystems Holdings and Sable Offshore

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

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

Diversification Opportunities for InfuSystems Holdings and Sable Offshore

0.17

Correlation Coefficient

InfuSystems Holdings  Sable Offshore

Average diversification

The 3 months correlation between InfuSystems and Sable is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and Sable Offshore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Offshore Corp and InfuSystems 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 InfuSystems Holdings are associated (or correlated) with Sable Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Offshore Corp has no effect on the direction of InfuSystems Holdings i.e., InfuSystems Holdings and Sable Offshore go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and Sable Offshore

Given the investment horizon of 90 days InfuSystems Holdings is expected to generate 13.21 times less return on investment than Sable Offshore. But when comparing it to its historical volatility, InfuSystems Holdings is 1.05 times less risky than Sable Offshore. It trades about 0.01 of its potential returns per unit of risk. Sable Offshore Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,011  in Sable Offshore Corp on October 10, 2024 and sell it today you would earn a total of  1,339  from holding Sable Offshore Corp or generate 132.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.55%
Values	Daily Returns

InfuSystems Holdings  vs.  Sable Offshore Corp

InfuSystems Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InfuSystems Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, InfuSystems Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sable Offshore Corp

Risk-Adjusted Performance

6 of 100

OK

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

Pair Trading with InfuSystems Holdings and Sable Offshore

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

The idea behind InfuSystems Holdings and Sable Offshore Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.