Correlation Between Barings BDC and Sable Offshore
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Sable Offshore 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 Barings BDC and Sable Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Sable Offshore Corp, you can compare the effects of market volatilities on Barings BDC and Sable Offshore 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 Barings BDC with a short position of Sable Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Sable Offshore.
Diversification Opportunities for Barings BDC and Sable Offshore
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barings and Sable is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Sable Offshore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Offshore Corp and Barings BDC 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 Barings BDC are associated (or correlated) with Sable Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Offshore Corp has no effect on the direction of Barings BDC i.e., Barings BDC and Sable Offshore go up and down completely randomly.
Pair Corralation between Barings BDC and Sable Offshore
Given the investment horizon of 90 days Barings BDC is expected to generate 3.51 times less return on investment than Sable Offshore. But when comparing it to its historical volatility, Barings BDC is 3.82 times less risky than Sable Offshore. It trades about 0.09 of its potential returns per unit of risk. Sable Offshore Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,083 in Sable Offshore Corp on September 4, 2024 and sell it today you would earn a total of 1,041 from holding Sable Offshore Corp or generate 96.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings BDC vs. Sable Offshore Corp
Performance |
| Timeline |
| Barings BDC |
| Sable Offshore Corp |
Barings BDC and Sable Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Sable Offshore
The main advantage of trading using opposite Barings BDC and Sable Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Sable Offshore 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 Sable Offshore will offset losses from the drop in Sable Offshore's long position.| Barings BDC vs. Runway Growth Finance | Barings BDC vs. OneMain Holdings | Barings BDC vs. Navient Corp | Barings BDC vs. Oaktree Specialty Lending |
| Sable Offshore vs. Helmerich and Payne | Sable Offshore vs. Noble plc | Sable Offshore vs. Nabors Industries | Sable Offshore vs. Precision Drilling |
Check out your portfolio center.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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