Correlation Between Sable Offshore and HUMANA

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

Diversification Opportunities for Sable Offshore and HUMANA

0.27

Correlation Coefficient

Sable Offshore  HUMANA

Modest diversification

The 3 months correlation between Sable and HUMANA is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sable Offshore Corp and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC 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 HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Sable Offshore i.e., Sable Offshore and HUMANA go up and down completely randomly.

Pair Corralation between Sable Offshore and HUMANA

Considering the 90-day investment horizon Sable Offshore Corp is expected to under-perform the HUMANA. In addition to that, Sable Offshore is 6.35 times more volatile than HUMANA INC. It trades about -0.03 of its total potential returns per unit of risk. HUMANA INC is currently generating about -0.19 per unit of volatility. If you would invest  8,466  in HUMANA INC on September 16, 2024 and sell it today you would lose (771.00) from holding HUMANA INC or give up 9.11% of portfolio value over 90 days.

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

Sable Offshore Corp  vs.  HUMANA INC

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.

HUMANA INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUMANA INC investors.

Pair Trading with Sable Offshore and HUMANA

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

The idea behind Sable Offshore Corp and HUMANA INC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.