Correlation Between Sable Offshore and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Barings BDC 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 Barings BDC 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 Barings BDC, you can compare the effects of market volatilities on Sable Offshore and Barings BDC 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 Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Barings BDC.
Diversification Opportunities for Sable Offshore and Barings BDC
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sable and Barings is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC 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 Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of Sable Offshore i.e., Sable Offshore and Barings BDC go up and down completely randomly.
Pair Corralation between Sable Offshore and Barings BDC
Considering the 90-day investment horizon Sable Offshore Corp is expected to under-perform the Barings BDC. In addition to that, Sable Offshore is 3.78 times more volatile than Barings BDC. It trades about -0.06 of its total potential returns per unit of risk. Barings BDC is currently generating about 0.45 per unit of volatility. If you would invest 941.00 in Barings BDC on September 4, 2024 and sell it today you would earn a total of 92.00 from holding Barings BDC or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sable Offshore Corp vs. Barings BDC
Performance |
| Timeline |
| Sable Offshore Corp |
| Barings BDC |
Sable Offshore and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Barings BDC
The main advantage of trading using opposite Sable Offshore and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, Barings BDC 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 Barings BDC will offset losses from the drop in Barings BDC's long position.| Sable Offshore vs. Helmerich and Payne | Sable Offshore vs. Noble plc | Sable Offshore vs. Nabors Industries | Sable Offshore vs. Precision Drilling |
| Barings BDC vs. Runway Growth Finance | Barings BDC vs. OneMain Holdings | Barings BDC vs. Navient Corp | Barings BDC vs. Oaktree Specialty Lending |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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