Correlation Between Baker Steel and Odyssean Investment
Can any of the company-specific risk be diversified away by investing in both Baker Steel and Odyssean Investment 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 Baker Steel and Odyssean Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Steel Resources and Odyssean Investment Trust, you can compare the effects of market volatilities on Baker Steel and Odyssean Investment 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 Baker Steel with a short position of Odyssean Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Steel and Odyssean Investment.
Diversification Opportunities for Baker Steel and Odyssean Investment
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baker and Odyssean is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Baker Steel Resources and Odyssean Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssean Investment Trust and Baker Steel 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 Baker Steel Resources are associated (or correlated) with Odyssean Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssean Investment Trust has no effect on the direction of Baker Steel i.e., Baker Steel and Odyssean Investment go up and down completely randomly.
Pair Corralation between Baker Steel and Odyssean Investment
Assuming the 90 days trading horizon Baker Steel Resources is expected to generate 3.32 times more return on investment than Odyssean Investment. However, Baker Steel is 3.32 times more volatile than Odyssean Investment Trust. It trades about 0.03 of its potential returns per unit of risk. Odyssean Investment Trust is currently generating about -0.01 per unit of risk. If you would invest 4,475 in Baker Steel Resources on September 4, 2024 and sell it today you would earn a total of 1,325 from holding Baker Steel Resources or generate 29.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Baker Steel Resources vs. Odyssean Investment Trust
Performance |
| Timeline |
| Baker Steel Resources |
| Odyssean Investment Trust |
Baker Steel and Odyssean Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baker Steel and Odyssean Investment
The main advantage of trading using opposite Baker Steel and Odyssean Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Steel position performs unexpectedly, Odyssean Investment 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 Odyssean Investment will offset losses from the drop in Odyssean Investment's long position.| Baker Steel vs. Future Metals NL | Baker Steel vs. JD Sports Fashion | Baker Steel vs. Zoom Video Communications | Baker Steel vs. Golden Metal Resources |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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