Correlation Between Sable Offshore and Sensient Technologies
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Sensient Technologies 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 Sensient Technologies 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 Sensient Technologies, you can compare the effects of market volatilities on Sable Offshore and Sensient Technologies 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 Sensient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Sensient Technologies.
Diversification Opportunities for Sable Offshore and Sensient Technologies
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sable and Sensient is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Sensient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensient Technologies 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 Sensient Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensient Technologies has no effect on the direction of Sable Offshore i.e., Sable Offshore and Sensient Technologies go up and down completely randomly.
Pair Corralation between Sable Offshore and Sensient Technologies
Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 1.88 times more return on investment than Sensient Technologies. However, Sable Offshore is 1.88 times more volatile than Sensient Technologies. It trades about 0.07 of its potential returns per unit of risk. Sensient Technologies is currently generating about 0.02 per unit of risk. If you would invest 1,003 in Sable Offshore Corp on September 3, 2024 and sell it today you would earn a total of 1,345 from holding Sable Offshore Corp or generate 134.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.55% |
| Values | Daily Returns |
Sable Offshore Corp vs. Sensient Technologies
Performance |
| Timeline |
| Sable Offshore Corp |
| Sensient Technologies |
Sable Offshore and Sensient Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Sensient Technologies
The main advantage of trading using opposite Sable Offshore and Sensient Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, Sensient Technologies 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 Sensient Technologies will offset losses from the drop in Sensient Technologies' long position.| Sable Offshore vs. Dine Brands Global | Sable Offshore vs. RCI Hospitality Holdings | Sable Offshore vs. Sweetgreen | Sable Offshore vs. Dennys Corp |
| Sensient Technologies vs. SPACE | Sensient Technologies vs. Bayview Acquisition Corp | Sensient Technologies vs. T Rowe Price | Sensient Technologies vs. Ampleforth |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges |