Correlation Between Sable Offshore and Chongqing Rural

Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Chongqing Rural 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 Chongqing Rural 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 Chongqing Rural Commercial, you can compare the effects of market volatilities on Sable Offshore and Chongqing Rural 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 Chongqing Rural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Chongqing Rural.

Diversification Opportunities for Sable Offshore and Chongqing Rural

-0.12

Correlation Coefficient

Sable Offshore  Chongqing Rural

Good diversification

The 3 months correlation between Sable and Chongqing is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Chongqing Rural Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Rural Comm 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 Chongqing Rural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Rural Comm has no effect on the direction of Sable Offshore i.e., Sable Offshore and Chongqing Rural go up and down completely randomly.

Pair Corralation between Sable Offshore and Chongqing Rural

If you would invest  2,252  in Sable Offshore Corp on October 22, 2024 and sell it today you would earn a total of  198.00  from holding Sable Offshore Corp or generate 8.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sable Offshore Corp  vs.  Chongqing Rural Commercial

Sable Offshore Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sable Offshore Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Sable Offshore exhibited solid returns over the last few months and may actually be approaching a breakup point.

Chongqing Rural Comm

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chongqing Rural Commercial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental drivers, Chongqing Rural showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sable Offshore and Chongqing Rural

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

The idea behind Sable Offshore Corp and Chongqing Rural Commercial 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.