Correlation Between MFF Capital and Odyssey Energy
Can any of the company-specific risk be diversified away by investing in both MFF Capital 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 MFF Capital and Odyssey Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFF Capital Investments and Odyssey Energy, you can compare the effects of market volatilities on MFF Capital 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 MFF Capital with a short position of Odyssey Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFF Capital and Odyssey Energy.
Diversification Opportunities for MFF Capital and Odyssey Energy
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFF and Odyssey is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding MFF Capital Investments and Odyssey Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Energy and MFF Capital 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 MFF Capital Investments 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 MFF Capital i.e., MFF Capital and Odyssey Energy go up and down completely randomly.
Pair Corralation between MFF Capital and Odyssey Energy
Assuming the 90 days trading horizon MFF Capital Investments is expected to generate 0.16 times more return on investment than Odyssey Energy. However, MFF Capital Investments is 6.13 times less risky than Odyssey Energy. It trades about 0.15 of its potential returns per unit of risk. Odyssey Energy is currently generating about 0.0 per unit of risk. If you would invest 215.00 in MFF Capital Investments on September 3, 2024 and sell it today you would earn a total of 220.00 from holding MFF Capital Investments or generate 102.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFF Capital Investments vs. Odyssey Energy
Performance |
| Timeline |
| MFF Capital Investments |
| Odyssey Energy |
MFF Capital and Odyssey Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFF Capital and Odyssey Energy
The main advantage of trading using opposite MFF Capital and Odyssey Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFF Capital 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.| MFF Capital vs. Mirrabooka Investments | MFF Capital vs. Carlton Investments | MFF Capital vs. Australian United Investment | MFF Capital vs. Platinum Asia Investments |
| Odyssey Energy vs. MetalsGrove Mining | Odyssey Energy vs. Apiam Animal Health | Odyssey Energy vs. COAST ENTERTAINMENT HOLDINGS | Odyssey Energy vs. Capitol Health |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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