Correlation Between Greentech Metals and Odyssey Energy
Can any of the company-specific risk be diversified away by investing in both Greentech Metals and Odyssey 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 Greentech Metals and Odyssey Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greentech Metals and Odyssey Energy, you can compare the effects of market volatilities on Greentech Metals and Odyssey 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 Greentech Metals with a short position of Odyssey Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greentech Metals and Odyssey Energy.
Diversification Opportunities for Greentech Metals and Odyssey Energy
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Greentech and Odyssey is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Greentech Metals and Odyssey Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Energy and Greentech Metals 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 Greentech Metals are associated (or correlated) with Odyssey Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssey Energy has no effect on the direction of Greentech Metals i.e., Greentech Metals and Odyssey Energy go up and down completely randomly.
Pair Corralation between Greentech Metals and Odyssey Energy
Assuming the 90 days trading horizon Greentech Metals is expected to under-perform the Odyssey Energy. In addition to that, Greentech Metals is 1.42 times more volatile than Odyssey Energy. It trades about -0.18 of its total potential returns per unit of risk. Odyssey Energy is currently generating about -0.06 per unit of volatility. If you would invest 2.20 in Odyssey Energy on September 1, 2024 and sell it today you would lose (0.20) from holding Odyssey Energy or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greentech Metals vs. Odyssey Energy
Performance |
| Timeline |
| Greentech Metals |
| Odyssey Energy |
Greentech Metals and Odyssey Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greentech Metals and Odyssey Energy
The main advantage of trading using opposite Greentech Metals and Odyssey Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greentech Metals position performs unexpectedly, Odyssey 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 Odyssey Energy will offset losses from the drop in Odyssey Energy's long position.| Greentech Metals vs. Northern Star Resources | Greentech Metals vs. Evolution Mining | Greentech Metals vs. Bluescope Steel | Greentech Metals vs. Sandfire Resources NL |
| Odyssey Energy vs. MFF Capital Investments | Odyssey Energy vs. Pinnacle Investment Management | Odyssey Energy vs. 29Metals | Odyssey Energy vs. BKI 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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