Correlation Between MetalsGrove Mining and Odyssey Energy
Can any of the company-specific risk be diversified away by investing in both MetalsGrove Mining 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 MetalsGrove Mining and Odyssey Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetalsGrove Mining and Odyssey Energy, you can compare the effects of market volatilities on MetalsGrove Mining 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 MetalsGrove Mining with a short position of Odyssey Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetalsGrove Mining and Odyssey Energy.
Diversification Opportunities for MetalsGrove Mining and Odyssey Energy
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MetalsGrove and Odyssey is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding MetalsGrove Mining and Odyssey Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Energy and MetalsGrove Mining 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 MetalsGrove Mining 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 MetalsGrove Mining i.e., MetalsGrove Mining and Odyssey Energy go up and down completely randomly.
Pair Corralation between MetalsGrove Mining and Odyssey Energy
Assuming the 90 days trading horizon MetalsGrove Mining is expected to under-perform the Odyssey Energy. But the stock apears to be less risky and, when comparing its historical volatility, MetalsGrove Mining is 1.01 times less risky than Odyssey Energy. The stock trades about -0.13 of its potential returns per unit of risk. The Odyssey Energy is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2.20 in Odyssey Energy on September 4, 2024 and sell it today you would lose (0.20) from holding Odyssey Energy or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MetalsGrove Mining vs. Odyssey Energy
Performance |
| Timeline |
| MetalsGrove Mining |
| Odyssey Energy |
MetalsGrove Mining and Odyssey Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetalsGrove Mining and Odyssey Energy
The main advantage of trading using opposite MetalsGrove Mining and Odyssey Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetalsGrove Mining 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.| MetalsGrove Mining vs. Northern Star Resources | MetalsGrove Mining vs. Evolution Mining | MetalsGrove Mining vs. Bluescope Steel | MetalsGrove Mining vs. Sandfire Resources NL |
| Odyssey Energy vs. Hotel Property Investments | Odyssey Energy vs. Saferoads Holdings | Odyssey Energy vs. Treasury Wine Estates | Odyssey Energy vs. Diversified United Investment |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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