Correlation Between Sable Offshore and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on Sable Offshore and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Coca Cola.
Diversification Opportunities for Sable Offshore and Coca Cola
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sable and Coca is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Sable Offshore i.e., Sable Offshore and Coca Cola go up and down completely randomly.
Pair Corralation between Sable Offshore and Coca Cola
Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 7.01 times more return on investment than Coca Cola. However, Sable Offshore is 7.01 times more volatile than The Coca Cola. It trades about 0.28 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.04 per unit of risk. If you would invest 2,252 in Sable Offshore Corp on October 24, 2024 and sell it today you would earn a total of 657.50 from holding Sable Offshore Corp or generate 29.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Sable Offshore Corp vs. The Coca Cola
Performance |
| Timeline |
| Sable Offshore Corp |
| Coca Cola |
Sable Offshore and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Coca Cola
The main advantage of trading using opposite Sable Offshore and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Sable Offshore vs. Dave Busters Entertainment | Sable Offshore vs. Snap On | Sable Offshore vs. Weibo Corp | Sable Offshore vs. Weyco Group |
| Coca Cola vs. Celsius Holdings | Coca Cola vs. Monster Beverage Corp | Coca Cola vs. Coca Cola Femsa SAB | Coca Cola vs. Keurig Dr Pepper |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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