Correlation Between Sable Offshore and NiSource
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and NiSource 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 NiSource 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 NiSource, you can compare the effects of market volatilities on Sable Offshore and NiSource 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 NiSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and NiSource.
Diversification Opportunities for Sable Offshore and NiSource
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sable and NiSource is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and NiSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NiSource 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 NiSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NiSource has no effect on the direction of Sable Offshore i.e., Sable Offshore and NiSource go up and down completely randomly.
Pair Corralation between Sable Offshore and NiSource
Considering the 90-day investment horizon Sable Offshore Corp is expected to under-perform the NiSource. In addition to that, Sable Offshore is 6.37 times more volatile than NiSource. It trades about -0.05 of its total potential returns per unit of risk. NiSource is currently generating about -0.27 per unit of volatility. If you would invest 3,795 in NiSource on September 24, 2024 and sell it today you would lose (178.00) from holding NiSource or give up 4.69% 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. NiSource
Performance |
Timeline |
Sable Offshore Corp |
NiSource |
Sable Offshore and NiSource Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sable Offshore and NiSource
The main advantage of trading using opposite Sable Offshore and NiSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, NiSource 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 NiSource will offset losses from the drop in NiSource's long position.Sable Offshore vs. Lion One Metals | Sable Offshore vs. Royalty Management Holding | Sable Offshore vs. NETGEAR | Sable Offshore vs. Perseus Mining Limited |
NiSource vs. NorthWestern | NiSource vs. Avista | NiSource vs. Otter Tail | NiSource vs. Companhia Paranaense de |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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