Correlation Between Sable Offshore and Ubisoft Entertainment

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

Diversification Opportunities for Sable Offshore and Ubisoft Entertainment

-0.27

Correlation Coefficient

Sable Offshore  Ubisoft Entertainment

Very good diversification

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

Pair Corralation between Sable Offshore and Ubisoft Entertainment

Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 2.31 times more return on investment than Ubisoft Entertainment. However, Sable Offshore is 2.31 times more volatile than Ubisoft Entertainment. It trades about 0.17 of its potential returns per unit of risk. Ubisoft Entertainment is currently generating about -0.17 per unit of risk. If you would invest  2,053  in Sable Offshore Corp on October 9, 2024 and sell it today you would earn a total of  325.00  from holding Sable Offshore Corp or generate 15.83% 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.  Ubisoft Entertainment

Sable Offshore Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sable Offshore Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Sable Offshore exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ubisoft Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ubisoft Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Sable Offshore and Ubisoft Entertainment

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

The idea behind Sable Offshore Corp and Ubisoft Entertainment 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.