Correlation Between Integrated Drilling and Sable Offshore

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Can any of the company-specific risk be diversified away by investing in both Integrated Drilling 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 Integrated Drilling and Sable Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Drilling Equipment and Sable Offshore Corp, you can compare the effects of market volatilities on Integrated Drilling 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 Integrated Drilling with a short position of Sable Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Drilling and Sable Offshore.

Diversification Opportunities for Integrated Drilling and Sable Offshore

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Integrated and Sable is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Drilling Equipment 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 Integrated Drilling 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 Integrated Drilling Equipment 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 Integrated Drilling i.e., Integrated Drilling and Sable Offshore go up and down completely randomly.

Pair Corralation between Integrated Drilling and Sable Offshore

If you would invest  1,652  in Sable Offshore Corp on October 26, 2024 and sell it today you would earn a total of  1,243  from holding Sable Offshore Corp or generate 75.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.19%
ValuesDaily Returns

Integrated Drilling Equipment  vs.  Sable Offshore Corp

 Performance 
       Timeline  
Integrated Drilling 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Integrated Drilling Equipment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Integrated Drilling is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Sable Offshore Corp 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Sable Offshore Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Sable Offshore exhibited solid returns over the last few months and may actually be approaching a breakup point.

Integrated Drilling and Sable Offshore Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Integrated Drilling and Sable Offshore

The main advantage of trading using opposite Integrated Drilling and Sable Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Drilling 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 Integrated Drilling Equipment 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.
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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