Correlation Between Lowes Companies and Sable Offshore
Can any of the company-specific risk be diversified away by investing in both Lowes Companies 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 Lowes Companies and Sable Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and Sable Offshore Corp, you can compare the effects of market volatilities on Lowes Companies 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 Lowes Companies with a short position of Sable Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and Sable Offshore.
Diversification Opportunities for Lowes Companies and Sable Offshore
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lowes and Sable is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies 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 Lowes Companies 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 Lowes Companies 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 Lowes Companies i.e., Lowes Companies and Sable Offshore go up and down completely randomly.
Pair Corralation between Lowes Companies and Sable Offshore
Considering the 90-day investment horizon Lowes Companies is expected to generate 0.31 times more return on investment than Sable Offshore. However, Lowes Companies is 3.25 times less risky than Sable Offshore. It trades about 0.21 of its potential returns per unit of risk. Sable Offshore Corp is currently generating about 0.02 per unit of risk. If you would invest 24,740 in Lowes Companies on November 4, 2024 and sell it today you would earn a total of 1,264 from holding Lowes Companies or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowes Companies vs. Sable Offshore Corp
Performance |
| Timeline |
| Lowes Companies |
| Sable Offshore Corp |
Lowes Companies and Sable Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and Sable Offshore
The main advantage of trading using opposite Lowes Companies and Sable Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies 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.| Lowes Companies vs. Floor Decor Holdings | Lowes Companies vs. Arhaus Inc | Lowes Companies vs. Haverty Furniture Companies | Lowes Companies vs. Home Depot |
| Sable Offshore vs. Direct Line Insurance | Sable Offshore vs. Root Inc | Sable Offshore vs. Old Republic International | Sable Offshore vs. WEC Energy Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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