Correlation Between Calima Energy and Melbana Energy
Can any of the company-specific risk be diversified away by investing in both Calima Energy and Melbana Energy 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 Calima Energy and Melbana Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calima Energy Limited and Melbana Energy Limited, you can compare the effects of market volatilities on Calima Energy and Melbana Energy 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 Calima Energy with a short position of Melbana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calima Energy and Melbana Energy.
Diversification Opportunities for Calima Energy and Melbana Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Calima and Melbana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Calima Energy Limited and Melbana Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melbana Energy and Calima 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 Calima Energy Limited are associated (or correlated) with Melbana Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melbana Energy has no effect on the direction of Calima Energy i.e., Calima Energy and Melbana Energy go up and down completely randomly.
Pair Corralation between Calima Energy and Melbana Energy
Assuming the 90 days horizon Calima Energy is expected to generate 1.05 times less return on investment than Melbana Energy. But when comparing it to its historical volatility, Calima Energy Limited is 1.01 times less risky than Melbana Energy. It trades about 0.06 of its potential returns per unit of risk. Melbana Energy Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.25 in Melbana Energy Limited on November 3, 2024 and sell it today you would earn a total of 0.25 from holding Melbana Energy Limited or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Calima Energy Limited vs. Melbana Energy Limited
Performance |
| Timeline |
| Calima Energy Limited |
| Melbana Energy |
Calima Energy and Melbana Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calima Energy and Melbana Energy
The main advantage of trading using opposite Calima Energy and Melbana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calima Energy position performs unexpectedly, Melbana Energy 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 Melbana Energy will offset losses from the drop in Melbana Energy's long position.| Calima Energy vs. Buru Energy Limited | Calima Energy vs. Altura Energy | Calima Energy vs. Daybreak Oil and | Calima Energy vs. Arrow Exploration Corp |
| Melbana Energy vs. Yuexiu Transport Infrastructure | Melbana Energy vs. Perseus Mining Limited | Melbana Energy vs. flyExclusive, | Melbana Energy vs. EastGroup Properties |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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