Correlation Between Melbana Energy and Gear Energy
Can any of the company-specific risk be diversified away by investing in both Melbana Energy and Gear 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 Melbana Energy and Gear Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melbana Energy Limited and Gear Energy, you can compare the effects of market volatilities on Melbana Energy and Gear 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 Melbana Energy with a short position of Gear Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melbana Energy and Gear Energy.
Diversification Opportunities for Melbana Energy and Gear Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Melbana and Gear is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Melbana Energy Limited and Gear Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gear Energy and Melbana 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 Melbana Energy Limited are associated (or correlated) with Gear Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gear Energy has no effect on the direction of Melbana Energy i.e., Melbana Energy and Gear Energy go up and down completely randomly.
Pair Corralation between Melbana Energy and Gear Energy
Assuming the 90 days horizon Melbana Energy Limited is expected to generate 15.63 times more return on investment than Gear Energy. However, Melbana Energy is 15.63 times more volatile than Gear Energy. It trades about 0.05 of its potential returns per unit of risk. Gear Energy is currently generating about -0.02 per unit of risk. If you would invest 2.80 in Melbana Energy Limited on August 29, 2024 and sell it today you would lose (0.80) from holding Melbana Energy Limited or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Melbana Energy Limited vs. Gear Energy
Performance |
| Timeline |
| Melbana Energy |
| Gear Energy |
Melbana Energy and Gear Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melbana Energy and Gear Energy
The main advantage of trading using opposite Melbana Energy and Gear Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melbana Energy position performs unexpectedly, Gear 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 Gear Energy will offset losses from the drop in Gear Energy's long position.| Melbana Energy vs. Permian Resources | Melbana Energy vs. Devon Energy | Melbana Energy vs. EOG Resources | Melbana Energy vs. Coterra Energy |
| Gear Energy vs. Petroleo Brasileiro Petrobras | Gear Energy vs. Equinor ASA ADR | Gear Energy vs. Eni SpA ADR | Gear Energy vs. YPF Sociedad Anonima |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |