Correlation Between New Source and Melbana Energy
Can any of the company-specific risk be diversified away by investing in both New Source and Melbana 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 New Source and Melbana Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Source Energy and Melbana Energy Limited, you can compare the effects of market volatilities on New Source and Melbana 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 New Source with a short position of Melbana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Source and Melbana Energy.
Diversification Opportunities for New Source and Melbana Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between New and Melbana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding New Source Energy and Melbana Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melbana Energy and New Source 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 New Source Energy are associated (or correlated) with Melbana Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melbana Energy has no effect on the direction of New Source i.e., New Source and Melbana Energy go up and down completely randomly.
Pair Corralation between New Source and Melbana Energy
If you would invest 0.25 in Melbana Energy Limited on November 3, 2024 and sell it today you would earn a total of 0.25 from holding Melbana Energy Limited or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
New Source Energy vs. Melbana Energy Limited
Performance |
| Timeline |
| New Source Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Melbana Energy |
New Source and Melbana Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Source and Melbana Energy
The main advantage of trading using opposite New Source and Melbana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Source position performs unexpectedly, Melbana 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 Melbana Energy will offset losses from the drop in Melbana Energy's long position.| New Source vs. Calima Energy Limited | New Source vs. Barrister Energy LLC | New Source vs. Buru Energy Limited | New Source vs. Altura Energy |
| Melbana Energy vs. Yuexiu Transport Infrastructure | Melbana Energy vs. Perseus Mining Limited | Melbana Energy vs. flyExclusive, | Melbana Energy vs. EastGroup Properties |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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