Correlation Between Sable Offshore and Inflection Point

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

Diversification Opportunities for Sable Offshore and Inflection Point

-0.11

Correlation Coefficient

Sable Offshore  Inflection Point

Good diversification

The 3 months correlation between Sable and Inflection is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Sable Offshore i.e., Sable Offshore and Inflection Point go up and down completely randomly.

Pair Corralation between Sable Offshore and Inflection Point

Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 27.5 times more return on investment than Inflection Point. However, Sable Offshore is 27.5 times more volatile than Inflection Point Acquisition. It trades about 0.01 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.19 per unit of risk. If you would invest  2,237  in Sable Offshore Corp on September 4, 2024 and sell it today you would lose (92.00) from holding Sable Offshore Corp or give up 4.11% of portfolio value over 90 days.

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

Sable Offshore Corp  vs.  Inflection Point Acquisition

Sable Offshore Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sable Offshore Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sable Offshore is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Inflection Point Acq

Risk-Adjusted Performance

14 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Inflection Point is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sable Offshore and Inflection Point

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

The idea behind Sable Offshore Corp and Inflection Point 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.