Correlation Between Sable Offshore and Molekule

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

Diversification Opportunities for Sable Offshore and Molekule

0.24

Correlation Coefficient

Sable Offshore  Molekule

Modest diversification

The 3 months correlation between Sable and Molekule is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Molekule Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molekule 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 Molekule. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molekule Group has no effect on the direction of Sable Offshore i.e., Sable Offshore and Molekule go up and down completely randomly.

Pair Corralation between Sable Offshore and Molekule

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	1.67%
Values	Daily Returns

Sable Offshore Corp  vs.  Molekule Group

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.

Molekule Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Molekule Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Molekule is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sable Offshore and Molekule

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

The idea behind Sable Offshore Corp and Molekule 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.