Correlation Between Clontarf Energy and Sable Offshore

Can any of the company-specific risk be diversified away by investing in both Clontarf Energy and Sable Offshore 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 Clontarf Energy and Sable Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clontarf Energy Plc and Sable Offshore Corp, you can compare the effects of market volatilities on Clontarf Energy and Sable Offshore 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 Clontarf Energy with a short position of Sable Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clontarf Energy and Sable Offshore.

Diversification Opportunities for Clontarf Energy and Sable Offshore

0.32

Correlation Coefficient

Clontarf Energy  Sable Offshore

Weak diversification

The 3 months correlation between Clontarf and Sable is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Clontarf Energy Plc and Sable Offshore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Offshore Corp and Clontarf Energy 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 Clontarf Energy Plc are associated (or correlated) with Sable Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Offshore Corp has no effect on the direction of Clontarf Energy i.e., Clontarf Energy and Sable Offshore go up and down completely randomly.

Pair Corralation between Clontarf Energy and Sable Offshore

Assuming the 90 days trading horizon Clontarf Energy Plc is expected to under-perform the Sable Offshore. In addition to that, Clontarf Energy is 1.4 times more volatile than Sable Offshore Corp. It trades about -0.11 of its total potential returns per unit of risk. Sable Offshore Corp is currently generating about 0.01 per unit of volatility. If you would invest  2,116  in Sable Offshore Corp on September 12, 2024 and sell it today you would lose (88.00) from holding Sable Offshore Corp or give up 4.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Clontarf Energy Plc  vs.  Sable Offshore Corp

Clontarf Energy Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clontarf Energy Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sable Offshore Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sable Offshore Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sable Offshore is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Clontarf Energy and Sable Offshore

The main advantage of trading using opposite Clontarf Energy and Sable Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clontarf Energy position performs unexpectedly, Sable Offshore 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 Sable Offshore will offset losses from the drop in Sable Offshore's long position.

The idea behind Clontarf Energy Plc and Sable Offshore Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.