Correlation Between Sable Offshore and Stepstone
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Stepstone 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 Stepstone 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 Stepstone Group, you can compare the effects of market volatilities on Sable Offshore and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Stepstone.
Diversification Opportunities for Sable Offshore and Stepstone
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sable and Stepstone is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Sable Offshore i.e., Sable Offshore and Stepstone go up and down completely randomly.
Pair Corralation between Sable Offshore and Stepstone
Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 2.81 times more return on investment than Stepstone. However, Sable Offshore is 2.81 times more volatile than Stepstone Group. It trades about 0.01 of its potential returns per unit of risk. Stepstone Group is currently generating about -0.04 per unit of risk. If you would invest 2,159 in Sable Offshore Corp on September 19, 2024 and sell it today you would lose (26.00) from holding Sable Offshore Corp or give up 1.2% 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. Stepstone Group
Performance |
| Timeline |
| Sable Offshore Corp |
| Stepstone Group |
Sable Offshore and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Stepstone
The main advantage of trading using opposite Sable Offshore and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| Sable Offshore vs. Helmerich and Payne | Sable Offshore vs. Noble plc | Sable Offshore vs. Nabors Industries | Sable Offshore vs. Precision Drilling |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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