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
If you would invest 1.15 in Pancontinental Oil Gas on August 28, 2024 and sell it today you would earn a total of 0.45 from holding Pancontinental Oil Gas or generate 39.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| 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. Permian Resources | Melbana Energy vs. Devon Energy | Melbana Energy vs. EOG Resources | Melbana Energy vs. Coterra Energy |
| Pancontinental Oil vs. Permian Resources | Pancontinental Oil vs. Devon Energy | Pancontinental Oil vs. EOG Resources | Pancontinental Oil 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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