Correlation Between Sable Offshore and Stagwell

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

Diversification Opportunities for Sable Offshore and Stagwell

0.27

Correlation Coefficient

Sable Offshore  Stagwell

Modest diversification

The 3 months correlation between Sable and Stagwell is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Sable Offshore i.e., Sable Offshore and Stagwell go up and down completely randomly.

Pair Corralation between Sable Offshore and Stagwell

Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 3.43 times more return on investment than Stagwell. However, Sable Offshore is 3.43 times more volatile than Stagwell. It trades about -0.05 of its potential returns per unit of risk. Stagwell is currently generating about -0.47 per unit of risk. If you would invest  2,431  in Sable Offshore Corp on September 24, 2024 and sell it today you would lose (204.00) from holding Sable Offshore Corp or give up 8.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Sable Offshore Corp  vs.  Stagwell

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Stagwell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stagwell has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Stagwell is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Sable Offshore and Stagwell

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

The idea behind Sable Offshore Corp and Stagwell 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.