Correlation Between Midway and Marmota Energy
Can any of the company-specific risk be diversified away by investing in both Midway and Marmota 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 Midway and Marmota Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midway and Marmota Energy, you can compare the effects of market volatilities on Midway and Marmota 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 Midway with a short position of Marmota Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midway and Marmota Energy.
Diversification Opportunities for Midway and Marmota Energy
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Midway and Marmota is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Midway and Marmota Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marmota Energy and Midway 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 Midway are associated (or correlated) with Marmota Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marmota Energy has no effect on the direction of Midway i.e., Midway and Marmota Energy go up and down completely randomly.
Pair Corralation between Midway and Marmota Energy
Assuming the 90 days trading horizon Midway is expected to generate 1.07 times more return on investment than Marmota Energy. However, Midway is 1.07 times more volatile than Marmota Energy. It trades about 0.03 of its potential returns per unit of risk. Marmota Energy is currently generating about 0.01 per unit of risk. If you would invest 90.00 in Midway on September 2, 2024 and sell it today you would earn a total of 35.00 from holding Midway or generate 38.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Midway vs. Marmota Energy
Performance |
| Timeline |
| Midway |
| Marmota Energy |
Midway and Marmota Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Midway and Marmota Energy
The main advantage of trading using opposite Midway and Marmota Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midway position performs unexpectedly, Marmota 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 Marmota Energy will offset losses from the drop in Marmota Energy's long position.| Midway vs. Northern Star Resources | Midway vs. Evolution Mining | Midway vs. Bluescope Steel | Midway vs. Sandfire Resources NL |
| Marmota Energy vs. Westpac Banking | Marmota Energy vs. ABACUS STORAGE KING | Marmota Energy vs. Odyssey Energy | Marmota Energy vs. Midway |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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