Correlation Between Sable Offshore and Playstudios

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

Diversification Opportunities for Sable Offshore and Playstudios

-0.14

Correlation Coefficient

Sable Offshore  Playstudios

Good diversification

The 3 months correlation between Sable and Playstudios is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Playstudios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playstudios 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 Playstudios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playstudios has no effect on the direction of Sable Offshore i.e., Sable Offshore and Playstudios go up and down completely randomly.

Pair Corralation between Sable Offshore and Playstudios

Considering the 90-day investment horizon Sable Offshore is expected to generate 1.76 times less return on investment than Playstudios. In addition to that, Sable Offshore is 1.14 times more volatile than Playstudios. It trades about 0.11 of its total potential returns per unit of risk. Playstudios is currently generating about 0.22 per unit of volatility. If you would invest  162.00  in Playstudios on September 20, 2024 and sell it today you would earn a total of  33.00  from holding Playstudios or generate 20.37% return on investment over 90 days.

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

Sable Offshore Corp  vs.  Playstudios

Sable Offshore Corp

Risk-Adjusted Performance

1 of 100

Very 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.

Playstudios

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Playstudios are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Playstudios unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sable Offshore and Playstudios

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

The idea behind Sable Offshore Corp and Playstudios 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.

Check out your portfolio center.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.