Correlation Between Sable Offshore and STRYKER

Can any of the company-specific risk be diversified away by investing in both Sable Offshore and STRYKER 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 STRYKER 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 STRYKER P 365, you can compare the effects of market volatilities on Sable Offshore and STRYKER 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 STRYKER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and STRYKER.

Diversification Opportunities for Sable Offshore and STRYKER

-0.65

Correlation Coefficient

Sable Offshore  STRYKER

Excellent diversification

The 3 months correlation between Sable and STRYKER is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and STRYKER P 365 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRYKER P 365 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 STRYKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRYKER P 365 has no effect on the direction of Sable Offshore i.e., Sable Offshore and STRYKER go up and down completely randomly.

Pair Corralation between Sable Offshore and STRYKER

Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 8.26 times more return on investment than STRYKER. However, Sable Offshore is 8.26 times more volatile than STRYKER P 365. It trades about 0.13 of its potential returns per unit of risk. STRYKER P 365 is currently generating about -0.3 per unit of risk. If you would invest  2,145  in Sable Offshore Corp on October 1, 2024 and sell it today you would earn a total of  240.00  from holding Sable Offshore Corp or generate 11.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Sable Offshore Corp  vs.  STRYKER P 365

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

STRYKER P 365

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STRYKER P 365 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, STRYKER 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 STRYKER

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

The idea behind Sable Offshore Corp and STRYKER P 365 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.