Correlation Between Melbana Energy and Pancontinental Oil
Can any of the company-specific risk be diversified away by investing in both Melbana Energy and Pancontinental Oil 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 Pancontinental Oil 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 Pancontinental Oil Gas, you can compare the effects of market volatilities on Melbana Energy and Pancontinental Oil 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 Pancontinental Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melbana Energy and Pancontinental Oil.
Diversification Opportunities for Melbana Energy and Pancontinental Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Melbana and Pancontinental is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Melbana Energy Limited and Pancontinental Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pancontinental Oil Gas 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 Pancontinental Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pancontinental Oil Gas has no effect on the direction of Melbana Energy i.e., Melbana Energy and Pancontinental Oil go up and down completely randomly.
Pair Corralation between Melbana Energy and Pancontinental Oil
Assuming the 90 days horizon Melbana Energy Limited is expected to generate 3.06 times more return on investment than Pancontinental Oil. However, Melbana Energy is 3.06 times more volatile than Pancontinental Oil Gas. It trades about 0.03 of its potential returns per unit of risk. Pancontinental Oil Gas is currently generating about 0.07 per unit of risk. If you would invest 3.50 in Melbana Energy Limited on October 23, 2024 and sell it today you would lose (3.30) from holding Melbana Energy Limited or give up 94.29% 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. Pancontinental Oil Gas
Performance |
| Timeline |
| Melbana Energy |
| Pancontinental Oil Gas |
Melbana Energy and Pancontinental Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melbana Energy and Pancontinental Oil
The main advantage of trading using opposite Melbana Energy and Pancontinental Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melbana Energy position performs unexpectedly, Pancontinental Oil 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 Pancontinental Oil will offset losses from the drop in Pancontinental Oil's long position.| Melbana Energy vs. Avanti Energy | Melbana Energy vs. CGX Energy | Melbana Energy vs. Royal Helium | Melbana Energy vs. Eco Oil Gas |
| Pancontinental Oil vs. Kiwetinohk Energy Corp | Pancontinental Oil vs. Melbana Energy Limited | Pancontinental Oil vs. Eco Oil Gas | Pancontinental Oil vs. Kelt Exploration |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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