Correlation Between Sable Offshore and Fortune Rise

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

Diversification Opportunities for Sable Offshore and Fortune Rise

-0.06

Correlation Coefficient

Sable Offshore  Fortune Rise

Good diversification

The 3 months correlation between Sable and Fortune is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Fortune Rise Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Rise Acquisition 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 Fortune Rise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Rise Acquisition has no effect on the direction of Sable Offshore i.e., Sable Offshore and Fortune Rise go up and down completely randomly.

Pair Corralation between Sable Offshore and Fortune Rise

Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 10.88 times more return on investment than Fortune Rise. However, Sable Offshore is 10.88 times more volatile than Fortune Rise Acquisition. It trades about 0.09 of its potential returns per unit of risk. Fortune Rise Acquisition is currently generating about 0.04 per unit of risk. If you would invest  1,540  in Sable Offshore Corp on September 29, 2024 and sell it today you would earn a total of  879.00  from holding Sable Offshore Corp or generate 57.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.4%
Values	Daily Returns

Sable Offshore Corp  vs.  Fortune Rise Acquisition

Sable Offshore Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sable Offshore Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Sable Offshore may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fortune Rise Acquisition

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Fortune Rise Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fortune Rise is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sable Offshore and Fortune Rise

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

The idea behind Sable Offshore Corp and Fortune Rise Acquisition 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.