Correlation Between Sable Offshore and Modine Manufacturing
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Modine Manufacturing 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 Modine Manufacturing 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 Modine Manufacturing, you can compare the effects of market volatilities on Sable Offshore and Modine Manufacturing 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 Modine Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Modine Manufacturing.
Diversification Opportunities for Sable Offshore and Modine Manufacturing
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sable and Modine is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Modine Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modine Manufacturing 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 Modine Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modine Manufacturing has no effect on the direction of Sable Offshore i.e., Sable Offshore and Modine Manufacturing go up and down completely randomly.
Pair Corralation between Sable Offshore and Modine Manufacturing
Considering the 90-day investment horizon Sable Offshore is expected to generate 1.09 times less return on investment than Modine Manufacturing. In addition to that, Sable Offshore is 1.54 times more volatile than Modine Manufacturing. It trades about 0.17 of its total potential returns per unit of risk. Modine Manufacturing is currently generating about 0.28 per unit of volatility. If you would invest 11,889 in Modine Manufacturing on October 21, 2024 and sell it today you would earn a total of 1,391 from holding Modine Manufacturing or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sable Offshore Corp vs. Modine Manufacturing
Performance |
| Timeline |
| Sable Offshore Corp |
| Modine Manufacturing |
Sable Offshore and Modine Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Modine Manufacturing
The main advantage of trading using opposite Sable Offshore and Modine Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, Modine Manufacturing 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 Modine Manufacturing will offset losses from the drop in Modine Manufacturing's long position.| Sable Offshore vs. Grupo Simec SAB | Sable Offshore vs. HUHUTECH International Group | Sable Offshore vs. Allegheny Technologies Incorporated | Sable Offshore vs. Summit Therapeutics PLC |
| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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