Correlation Between Gear Energy and Melbana Energy
Can any of the company-specific risk be diversified away by investing in both Gear 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 Gear 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 Gear Energy and Melbana Energy Limited, you can compare the effects of market volatilities on Gear 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 Gear Energy with a short position of Melbana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gear Energy and Melbana Energy.
Diversification Opportunities for Gear Energy and Melbana Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gear and Melbana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gear Energy and Melbana Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melbana Energy and Gear 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 Gear Energy 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 Gear Energy i.e., Gear Energy and Melbana Energy go up and down completely randomly.
Pair Corralation between Gear Energy and Melbana Energy
If you would invest 2.00 in Melbana Energy Limited on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Melbana Energy Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gear Energy vs. Melbana Energy Limited
Performance |
| Timeline |
| Gear Energy |
| Melbana Energy |
Gear Energy and Melbana Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gear Energy and Melbana Energy
The main advantage of trading using opposite Gear Energy and Melbana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gear 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.| Gear Energy vs. Tamarack Valley Energy | Gear Energy vs. MEG Energy Corp | Gear Energy vs. Cardinal Energy | Gear Energy vs. Whitecap Resources |
| Melbana Energy vs. Permian Resources | Melbana Energy vs. Devon Energy | Melbana Energy vs. EOG Resources | Melbana Energy vs. Coterra Energy |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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