Correlation Between NRG Energy and Sable Offshore
Can any of the company-specific risk be diversified away by investing in both NRG Energy 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 NRG Energy and Sable Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRG Energy and Sable Offshore Corp, you can compare the effects of market volatilities on NRG Energy 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 NRG Energy with a short position of Sable Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRG Energy and Sable Offshore.
Diversification Opportunities for NRG Energy and Sable Offshore
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NRG and Sable is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NRG Energy 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 NRG Energy 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 NRG Energy 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 NRG Energy i.e., NRG Energy and Sable Offshore go up and down completely randomly.
Pair Corralation between NRG Energy and Sable Offshore
Considering the 90-day investment horizon NRG Energy is expected to generate 0.72 times more return on investment than Sable Offshore. However, NRG Energy is 1.4 times less risky than Sable Offshore. It trades about 0.08 of its potential returns per unit of risk. Sable Offshore Corp is currently generating about -0.03 per unit of risk. If you would invest 9,363 in NRG Energy on September 3, 2024 and sell it today you would earn a total of 798.00 from holding NRG Energy or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRG Energy vs. Sable Offshore Corp
Performance |
| Timeline |
| NRG Energy |
| Sable Offshore Corp |
NRG Energy and Sable Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRG Energy and Sable Offshore
The main advantage of trading using opposite NRG Energy and Sable Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRG Energy 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.| NRG Energy vs. TransAlta Corp | NRG Energy vs. Kenon Holdings | NRG Energy vs. Pampa Energia SA | NRG Energy vs. AGL Energy |
| Sable Offshore vs. Dine Brands Global | Sable Offshore vs. RCI Hospitality Holdings | Sable Offshore vs. Sweetgreen | Sable Offshore vs. Dennys Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |