Correlation Between Shell PLC and Stabilis Solutions

Can any of the company-specific risk be diversified away by investing in both Shell PLC and Stabilis Solutions 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 Shell PLC and Stabilis Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shell PLC ADR and Stabilis Solutions, you can compare the effects of market volatilities on Shell PLC and Stabilis Solutions 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 Shell PLC with a short position of Stabilis Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shell PLC and Stabilis Solutions.

Diversification Opportunities for Shell PLC and Stabilis Solutions

-0.81

Correlation Coefficient

Shell PLC  Stabilis Solutions

Pay attention - limited upside

The 3 months correlation between Shell and Stabilis is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Shell PLC ADR and Stabilis Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stabilis Solutions and Shell PLC 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 Shell PLC ADR are associated (or correlated) with Stabilis Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stabilis Solutions has no effect on the direction of Shell PLC i.e., Shell PLC and Stabilis Solutions go up and down completely randomly.

Pair Corralation between Shell PLC and Stabilis Solutions

Given the investment horizon of 90 days Shell PLC ADR is expected to generate 0.25 times more return on investment than Stabilis Solutions. However, Shell PLC ADR is 3.97 times less risky than Stabilis Solutions. It trades about 0.14 of its potential returns per unit of risk. Stabilis Solutions is currently generating about -0.12 per unit of risk. If you would invest  6,571  in Shell PLC ADR on May 21, 2025 and sell it today you would earn a total of  610.00  from holding Shell PLC ADR or generate 9.28% return on investment over 90 days.

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

Shell PLC ADR  vs.  Stabilis Solutions

Shell PLC ADR

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Shell PLC ADR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Shell PLC may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Stabilis Solutions

Risk-Adjusted Performance

Weakest

Over the last 90 days Stabilis Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Shell PLC and Stabilis Solutions

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

The idea behind Shell PLC ADR and Stabilis Solutions 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.