Correlation Between Sable Offshore and Everspin Technologies

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

Diversification Opportunities for Sable Offshore and Everspin Technologies

-0.38

Correlation Coefficient

Sable Offshore  Everspin Technologies

Very good diversification

The 3 months correlation between Sable and Everspin is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Everspin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everspin Technologies 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 Everspin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everspin Technologies has no effect on the direction of Sable Offshore i.e., Sable Offshore and Everspin Technologies go up and down completely randomly.

Pair Corralation between Sable Offshore and Everspin Technologies

Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 1.2 times more return on investment than Everspin Technologies. However, Sable Offshore is 1.2 times more volatile than Everspin Technologies. It trades about 0.07 of its potential returns per unit of risk. Everspin Technologies is currently generating about 0.02 per unit of risk. If you would invest  1,005  in Sable Offshore Corp on September 29, 2024 and sell it today you would earn a total of  1,414  from holding Sable Offshore Corp or generate 140.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.56%
Values	Daily Returns

Sable Offshore Corp  vs.  Everspin Technologies

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.

Everspin Technologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Everspin Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Everspin Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sable Offshore and Everspin Technologies

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

The idea behind Sable Offshore Corp and Everspin Technologies 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.