Correlation Between Ithaca Energy and Ondine Biomedical
Can any of the company-specific risk be diversified away by investing in both Ithaca Energy and Ondine Biomedical 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 Ithaca Energy and Ondine Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ithaca Energy PLC and Ondine Biomedical, you can compare the effects of market volatilities on Ithaca Energy and Ondine Biomedical 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 Ithaca Energy with a short position of Ondine Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ithaca Energy and Ondine Biomedical.
Diversification Opportunities for Ithaca Energy and Ondine Biomedical
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ithaca and Ondine is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ithaca Energy PLC and Ondine Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ondine Biomedical and Ithaca 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 Ithaca Energy PLC are associated (or correlated) with Ondine Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ondine Biomedical has no effect on the direction of Ithaca Energy i.e., Ithaca Energy and Ondine Biomedical go up and down completely randomly.
Pair Corralation between Ithaca Energy and Ondine Biomedical
Assuming the 90 days trading horizon Ithaca Energy PLC is expected to under-perform the Ondine Biomedical. But the stock apears to be less risky and, when comparing its historical volatility, Ithaca Energy PLC is 1.93 times less risky than Ondine Biomedical. The stock trades about -0.02 of its potential returns per unit of risk. The Ondine Biomedical is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,950 in Ondine Biomedical on November 2, 2024 and sell it today you would lose (750.00) from holding Ondine Biomedical or give up 38.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ithaca Energy PLC vs. Ondine Biomedical
Performance |
| Timeline |
| Ithaca Energy PLC |
| Ondine Biomedical |
Ithaca Energy and Ondine Biomedical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ithaca Energy and Ondine Biomedical
The main advantage of trading using opposite Ithaca Energy and Ondine Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ithaca Energy position performs unexpectedly, Ondine Biomedical 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 Ondine Biomedical will offset losses from the drop in Ondine Biomedical's long position.| Ithaca Energy vs. Ubisoft Entertainment | Ithaca Energy vs. Liberty Media Corp | Ithaca Energy vs. Prosiebensat 1 Media | Ithaca Energy vs. Applied Materials |
| Ondine Biomedical vs. GoldMining | Ondine Biomedical vs. Rheinmetall AG | Ondine Biomedical vs. Sealed Air Corp | Ondine Biomedical vs. Ryanair Holdings plc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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