Correlation Between Sable Offshore and CITIGROUP

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

Diversification Opportunities for Sable Offshore and CITIGROUP

-0.23

Correlation Coefficient

Sable Offshore  CITIGROUP

Very good diversification

The 3 months correlation between Sable and CITIGROUP is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and CITIGROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 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 CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP INC has no effect on the direction of Sable Offshore i.e., Sable Offshore and CITIGROUP go up and down completely randomly.

Pair Corralation between Sable Offshore and CITIGROUP

Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 26.12 times more return on investment than CITIGROUP. However, Sable Offshore is 26.12 times more volatile than CITIGROUP INC. It trades about 0.07 of its potential returns per unit of risk. CITIGROUP INC is currently generating about 0.07 per unit of risk. If you would invest  1,984  in Sable Offshore Corp on October 10, 2024 and sell it today you would earn a total of  292.00  from holding Sable Offshore Corp or generate 14.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Sable Offshore Corp  vs.  CITIGROUP INC

Sable Offshore Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sable Offshore Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Sable Offshore exhibited solid returns over the last few months and may actually be approaching a breakup point.

CITIGROUP INC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CITIGROUP INC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CITIGROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sable Offshore and CITIGROUP

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

The idea behind Sable Offshore Corp and CITIGROUP INC 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .