Correlation Between Sable Offshore and Hongli Group
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Hongli Group 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 Hongli Group 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 Hongli Group Ordinary, you can compare the effects of market volatilities on Sable Offshore and Hongli Group 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 Hongli Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Hongli Group.
Diversification Opportunities for Sable Offshore and Hongli Group
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sable and Hongli is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Hongli Group Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongli Group Ordinary 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 Hongli Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongli Group Ordinary has no effect on the direction of Sable Offshore i.e., Sable Offshore and Hongli Group go up and down completely randomly.
Pair Corralation between Sable Offshore and Hongli Group
Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 0.94 times more return on investment than Hongli Group. However, Sable Offshore Corp is 1.06 times less risky than Hongli Group. It trades about 0.01 of its potential returns per unit of risk. Hongli Group Ordinary is currently generating about -0.05 per unit of risk. If you would invest 2,276 in Sable Offshore Corp on November 9, 2024 and sell it today you would lose (17.00) from holding Sable Offshore Corp or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sable Offshore Corp vs. Hongli Group Ordinary
Performance |
| Timeline |
| Sable Offshore Corp |
| Hongli Group Ordinary |
Sable Offshore and Hongli Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Hongli Group
The main advantage of trading using opposite Sable Offshore and Hongli Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, Hongli Group 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 Hongli Group will offset losses from the drop in Hongli Group's long position.| Sable Offshore vs. LAir Liquide SA | Sable Offshore vs. Cirrus Logic | Sable Offshore vs. ASML Holding NV | Sable Offshore vs. MagnaChip Semiconductor |
| Hongli Group vs. Pearson PLC ADR | Hongli Group vs. Cameco Corp | Hongli Group vs. East Africa Metals | Hongli Group vs. Aluminum of |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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