Correlation Between Sable Offshore and Global Net
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Global Net 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 Global Net 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 Global Net Lease, you can compare the effects of market volatilities on Sable Offshore and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Global Net.
Diversification Opportunities for Sable Offshore and Global Net
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sable and Global is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Sable Offshore i.e., Sable Offshore and Global Net go up and down completely randomly.
Pair Corralation between Sable Offshore and Global Net
Considering the 90-day investment horizon Sable Offshore Corp is expected to under-perform the Global Net. In addition to that, Sable Offshore is 4.1 times more volatile than Global Net Lease. It trades about -0.06 of its total potential returns per unit of risk. Global Net Lease is currently generating about 0.18 per unit of volatility. If you would invest 2,225 in Global Net Lease on September 4, 2024 and sell it today you would earn a total of 79.00 from holding Global Net Lease or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sable Offshore Corp vs. Global Net Lease
Performance |
| Timeline |
| Sable Offshore Corp |
| Global Net Lease |
Sable Offshore and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Global Net
The main advantage of trading using opposite Sable Offshore and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Sable Offshore vs. Helmerich and Payne | Sable Offshore vs. Noble plc | Sable Offshore vs. Nabors Industries | Sable Offshore vs. Precision Drilling |
| Global Net vs. CF Industries Holdings | Global Net vs. Ecolab Inc | Global Net vs. Mayfair Gold Corp | Global Net vs. Luxfer Holdings PLC |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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