Correlation Between NYSE Composite and Melbana Energy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Melbana Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Melbana Energy Limited, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Melbana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Melbana Energy.
Diversification Opportunities for NYSE Composite and Melbana Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Melbana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Melbana Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melbana Energy and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Melbana Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and Melbana Energy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 30.08 times less return on investment than Melbana Energy. But when comparing it to its historical volatility, NYSE Composite is 74.2 times less risky than Melbana Energy. It trades about 0.11 of its potential returns per unit of risk. Melbana Energy Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.50 in Melbana Energy Limited on August 26, 2024 and sell it today you would lose (1.50) from holding Melbana Energy Limited or give up 42.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Melbana Energy Limited
Performance |
| Timeline |
NYSE Composite and Melbana Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Melbana Energy Limited
Pair trading matchups for Melbana Energy
Pair Trading with NYSE Composite and Melbana Energy
The main advantage of trading using opposite NYSE Composite and Melbana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Melbana Energy vs. Permian Resources | Melbana Energy vs. Devon Energy | Melbana Energy vs. EOG Resources | Melbana Energy vs. Coterra Energy |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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