Correlation Between Maanshan Iron and Sable Offshore
Can any of the company-specific risk be diversified away by investing in both Maanshan Iron 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 Maanshan Iron and Sable Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maanshan Iron Steel and Sable Offshore Corp, you can compare the effects of market volatilities on Maanshan Iron 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 Maanshan Iron with a short position of Sable Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and Sable Offshore.
Diversification Opportunities for Maanshan Iron and Sable Offshore
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maanshan and Sable is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel 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 Maanshan Iron 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 Maanshan Iron Steel 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 Maanshan Iron i.e., Maanshan Iron and Sable Offshore go up and down completely randomly.
Pair Corralation between Maanshan Iron and Sable Offshore
Assuming the 90 days horizon Maanshan Iron is expected to generate 6.02 times less return on investment than Sable Offshore. In addition to that, Maanshan Iron is 1.25 times more volatile than Sable Offshore Corp. It trades about 0.01 of its total potential returns per unit of risk. Sable Offshore Corp is currently generating about 0.1 per unit of volatility. If you would invest 1,447 in Sable Offshore Corp on August 31, 2024 and sell it today you would earn a total of 901.00 from holding Sable Offshore Corp or generate 62.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Maanshan Iron Steel vs. Sable Offshore Corp
Performance |
| Timeline |
| Maanshan Iron Steel |
| Sable Offshore Corp |
Maanshan Iron and Sable Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maanshan Iron and Sable Offshore
The main advantage of trading using opposite Maanshan Iron and Sable Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron 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.| Maanshan Iron vs. Olympic Steel | Maanshan Iron vs. POSCO Holdings | Maanshan Iron vs. Steel Dynamics | Maanshan Iron vs. Universal Stainless Alloy |
| Sable Offshore vs. Nabors Industries | Sable Offshore vs. Patterson UTI Energy | Sable Offshore vs. Noble plc | Sable Offshore vs. Helmerich and Payne |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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