Correlation Between Mirage Energy and Frontline
Can any of the company-specific risk be diversified away by investing in both Mirage Energy and Frontline 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 Mirage Energy and Frontline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirage Energy Corp and Frontline, you can compare the effects of market volatilities on Mirage Energy and Frontline 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 Mirage Energy with a short position of Frontline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirage Energy and Frontline.
Diversification Opportunities for Mirage Energy and Frontline
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mirage and Frontline is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Mirage Energy Corp and Frontline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontline and Mirage 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 Mirage Energy Corp are associated (or correlated) with Frontline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontline has no effect on the direction of Mirage Energy i.e., Mirage Energy and Frontline go up and down completely randomly.
Pair Corralation between Mirage Energy and Frontline
Given the investment horizon of 90 days Mirage Energy Corp is expected to generate 32.77 times more return on investment than Frontline. However, Mirage Energy is 32.77 times more volatile than Frontline. It trades about 0.12 of its potential returns per unit of risk. Frontline is currently generating about 0.03 per unit of risk. If you would invest 0.60 in Mirage Energy Corp on January 18, 2025 and sell it today you would earn a total of 2.20 from holding Mirage Energy Corp or generate 366.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirage Energy Corp vs. Frontline
Performance |
| Timeline |
| Mirage Energy Corp |
| Frontline |
Mirage Energy and Frontline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirage Energy and Frontline
The main advantage of trading using opposite Mirage Energy and Frontline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirage Energy position performs unexpectedly, Frontline 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 Frontline will offset losses from the drop in Frontline's long position.| Mirage Energy vs. Martin Midstream Partners | Mirage Energy vs. Kinetik Holdings | Mirage Energy vs. NGL Energy Partners | Mirage Energy vs. Genesis Energy LP |
| Frontline vs. Teekay Tankers | Frontline vs. DHT Holdings | Frontline vs. International Seaways | Frontline vs. Scorpio Tankers |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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