Correlation Between PAO NOVATEK and Melbana Energy

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Can any of the company-specific risk be diversified away by investing in both PAO NOVATEK 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 PAO NOVATEK and Melbana Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PAO NOVATEK and Melbana Energy Limited, you can compare the effects of market volatilities on PAO NOVATEK 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 PAO NOVATEK with a short position of Melbana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAO NOVATEK and Melbana Energy.

Diversification Opportunities for PAO NOVATEK and Melbana Energy

-1.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between PAO and Melbana is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding PAO NOVATEK and Melbana Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melbana Energy and PAO NOVATEK 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 PAO NOVATEK 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 PAO NOVATEK i.e., PAO NOVATEK and Melbana Energy go up and down completely randomly.

Pair Corralation between PAO NOVATEK and Melbana Energy

If you would invest  2.00  in Melbana Energy Limited on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Melbana Energy Limited or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthStrong
Accuracy4.76%
ValuesDaily Returns

PAO NOVATEK  vs.  Melbana Energy Limited

 Performance 
       Timeline  
PAO NOVATEK 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PAO NOVATEK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, PAO NOVATEK is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
Melbana Energy 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Melbana Energy Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Melbana Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PAO NOVATEK and Melbana Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PAO NOVATEK and Melbana Energy

The main advantage of trading using opposite PAO NOVATEK and Melbana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAO NOVATEK 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.
The idea behind PAO NOVATEK and Melbana Energy Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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