Correlation Between Sable Offshore and Lucid

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

Diversification Opportunities for Sable Offshore and Lucid

0.19

Correlation Coefficient

Sable Offshore  Lucid

Average diversification

The 3 months correlation between Sable and Lucid is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group 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 Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of Sable Offshore i.e., Sable Offshore and Lucid go up and down completely randomly.

Pair Corralation between Sable Offshore and Lucid

Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 0.62 times more return on investment than Lucid. However, Sable Offshore Corp is 1.6 times less risky than Lucid. It trades about 0.07 of its potential returns per unit of risk. Lucid Group is currently generating about 0.0 per unit of risk. If you would invest  1,008  in Sable Offshore Corp on September 22, 2024 and sell it today you would earn a total of  1,219  from holding Sable Offshore Corp or generate 120.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.76%
Values	Daily Returns

Sable Offshore Corp  vs.  Lucid Group

Sable Offshore Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sable Offshore Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Lucid Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lucid Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Lucid is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sable Offshore and Lucid

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

The idea behind Sable Offshore Corp and Lucid Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.