Correlation Between Sable Offshore and Olympic Steel
Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Olympic Steel 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 Olympic Steel 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 Olympic Steel, you can compare the effects of market volatilities on Sable Offshore and Olympic Steel 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 Olympic Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Olympic Steel.
Diversification Opportunities for Sable Offshore and Olympic Steel
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sable and Olympic is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Olympic Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Steel 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 Olympic Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympic Steel has no effect on the direction of Sable Offshore i.e., Sable Offshore and Olympic Steel go up and down completely randomly.
Pair Corralation between Sable Offshore and Olympic Steel
Considering the 90-day investment horizon Sable Offshore Corp is expected to generate 1.13 times more return on investment than Olympic Steel. However, Sable Offshore is 1.13 times more volatile than Olympic Steel. It trades about 0.07 of its potential returns per unit of risk. Olympic Steel is currently generating about 0.03 per unit of risk. If you would invest 999.00 in Sable Offshore Corp on September 2, 2024 and sell it today you would earn a total of 1,349 from holding Sable Offshore Corp or generate 135.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.56% |
| Values | Daily Returns |
Sable Offshore Corp vs. Olympic Steel
Performance |
| Timeline |
| Sable Offshore Corp |
| Olympic Steel |
Sable Offshore and Olympic Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sable Offshore and Olympic Steel
The main advantage of trading using opposite Sable Offshore and Olympic Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sable Offshore position performs unexpectedly, Olympic Steel 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 Olympic Steel will offset losses from the drop in Olympic Steel's long position.| Sable Offshore vs. Helmerich and Payne | Sable Offshore vs. Noble plc | Sable Offshore vs. Nabors Industries | Sable Offshore vs. Precision Drilling |
| Olympic Steel vs. Universal Stainless Alloy | Olympic Steel vs. Outokumpu Oyj ADR | Olympic Steel vs. Usinas Siderurgicas de | Olympic Steel vs. POSCO Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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