Correlation Between Sable Offshore and Bellevue Life

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

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

Diversification Opportunities for Sable Offshore and Bellevue Life

0.3

Correlation Coefficient

Sable Offshore  Bellevue Life

Weak diversification

The 3 months correlation between Sable and Bellevue is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Bellevue Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Life Sciences and Sable Offshore 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 Sable Offshore Corp are associated (or correlated) with Bellevue Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Life Sciences has no effect on the direction of Sable Offshore i.e., Sable Offshore and Bellevue Life go up and down completely randomly.

Pair Corralation between Sable Offshore and Bellevue Life

Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 2.11 times more return on investment than Bellevue Life. However, Sable Offshore is 2.11 times more volatile than Bellevue Life Sciences. It trades about 0.13 of its potential returns per unit of risk. Bellevue Life Sciences is currently generating about 0.04 per unit of risk. If you would invest  2,069  in Sable Offshore Corp on October 25, 2024 and sell it today you would earn a total of  720.00  from holding Sable Offshore Corp or generate 34.8% return on investment over 90 days.

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

Sable Offshore Corp  vs.  Bellevue Life Sciences

Sable Offshore Corp

Risk-Adjusted Performance

10 of 100

Good

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.

Bellevue Life Sciences

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bellevue Life Sciences are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Bellevue Life is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sable Offshore and Bellevue Life

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

The idea behind Sable Offshore Corp and Bellevue Life Sciences 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.