Correlation Between Sable Offshore and Magnera Corp

Can any of the company-specific risk be diversified away by investing in both Sable Offshore and Magnera Corp 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 Magnera Corp 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 Magnera Corp placeholder, you can compare the effects of market volatilities on Sable Offshore and Magnera Corp 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 Magnera Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sable Offshore and Magnera Corp.

Diversification Opportunities for Sable Offshore and Magnera Corp

0.06

Correlation Coefficient

Sable Offshore  Magnera Corp

Significant diversification

The 3 months correlation between Sable and Magnera is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and Magnera Corp placeholder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnera Corp placeholder 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 Magnera Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnera Corp placeholder has no effect on the direction of Sable Offshore i.e., Sable Offshore and Magnera Corp go up and down completely randomly.

Pair Corralation between Sable Offshore and Magnera Corp

Considering the 90-day investment horizon Sable Offshore Corp is expected to under-perform the Magnera Corp. In addition to that, Sable Offshore is 1.35 times more volatile than Magnera Corp placeholder. It trades about -0.03 of its total potential returns per unit of risk. Magnera Corp placeholder is currently generating about -0.02 per unit of volatility. If you would invest  2,093  in Magnera Corp placeholder on September 16, 2024 and sell it today you would lose (192.00) from holding Magnera Corp placeholder or give up 9.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sable Offshore Corp  vs.  Magnera Corp placeholder

Sable Offshore Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sable Offshore Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Magnera Corp placeholder

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Magnera Corp placeholder has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Magnera Corp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sable Offshore and Magnera Corp

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

The idea behind Sable Offshore Corp and Magnera Corp placeholder 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.