Correlation Between Sable Offshore and Noble Plc
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Noble Plc 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 Noble Plc 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 Noble plc, you can compare the effects of market volatilities on Sable Offshore and Noble Plc 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 Noble Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Noble Plc.
Diversification Opportunities for Sable Offshore and Noble Plc
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sable and Noble is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Noble plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble plc 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 Noble Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble plc has no effect on the direction of Sable Offshore i.e., Sable Offshore and Noble Plc go up and down completely randomly.
Pair Corralation between Sable Offshore and Noble Plc
Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 1.72 times more return on investment than Noble Plc. However, Sable Offshore is 1.72 times more volatile than Noble plc. It trades about 0.09 of its potential returns per unit of risk. Noble plc is currently generating about -0.02 per unit of risk. If you would invest 1,027 in Sable Offshore Corp on August 28, 2024 and sell it today you would earn a total of 1,404 from holding Sable Offshore Corp or generate 136.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.92% |
| Values | Daily Returns |
Sable Offshore Corp vs. Noble plc
Performance |
| Timeline |
| Sable Offshore Corp |
| Noble plc |
Sable Offshore and Noble Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Noble Plc
The main advantage of trading using opposite Sable Offshore and Noble Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, Noble Plc 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 Noble Plc will offset losses from the drop in Noble Plc's long position.| Sable Offshore vs. enVVeno Medical Corp | Sable Offshore vs. BioNTech SE | Sable Offshore vs. Maanshan Iron Steel | Sable Offshore vs. Xponential Fitness |
| Noble Plc vs. Seadrill Limited | Noble Plc vs. Borr Drilling | Noble Plc vs. Patterson UTI Energy | Noble Plc vs. Transocean |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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