Correlation Between Sable Offshore and 126408GW7

Can any of the company-specific risk be diversified away by investing in both Sable Offshore and 126408GW7 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 126408GW7 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 CSX P 475, you can compare the effects of market volatilities on Sable Offshore and 126408GW7 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 126408GW7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and 126408GW7.

Diversification Opportunities for Sable Offshore and 126408GW7

-0.38

Correlation Coefficient

Sable Offshore  126408GW7

Very good diversification

The 3 months correlation between Sable and 126408GW7 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and CSX P 475 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX P 475 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 126408GW7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX P 475 has no effect on the direction of Sable Offshore i.e., Sable Offshore and 126408GW7 go up and down completely randomly.

Pair Corralation between Sable Offshore and 126408GW7

Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 3.69 times more return on investment than 126408GW7. However, Sable Offshore is 3.69 times more volatile than CSX P 475. It trades about 0.12 of its potential returns per unit of risk. CSX P 475 is currently generating about 0.02 per unit of risk. If you would invest  2,140  in Sable Offshore Corp on October 26, 2024 and sell it today you would earn a total of  642.00  from holding Sable Offshore Corp or generate 30.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.0%
Values	Daily Returns

Sable Offshore Corp  vs.  CSX P 475

Sable Offshore Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sable Offshore Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Sable Offshore exhibited solid returns over the last few months and may actually be approaching a breakup point.

CSX P 475

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CSX P 475 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 126408GW7 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sable Offshore and 126408GW7

The main advantage of trading using opposite Sable Offshore and 126408GW7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, 126408GW7 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 126408GW7 will offset losses from the drop in 126408GW7's long position.

The idea behind Sable Offshore Corp and CSX P 475 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.