Correlation Between Odyssey Energy and Jupiter Energy
Can any of the company-specific risk be diversified away by investing in both Odyssey Energy and Jupiter 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 Odyssey Energy and Jupiter Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odyssey Energy and Jupiter Energy, you can compare the effects of market volatilities on Odyssey Energy and Jupiter 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 Odyssey Energy with a short position of Jupiter Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odyssey Energy and Jupiter Energy.
Diversification Opportunities for Odyssey Energy and Jupiter Energy
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Odyssey and Jupiter is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Energy and Jupiter Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Energy and Odyssey 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 Odyssey Energy are associated (or correlated) with Jupiter Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Energy has no effect on the direction of Odyssey Energy i.e., Odyssey Energy and Jupiter Energy go up and down completely randomly.
Pair Corralation between Odyssey Energy and Jupiter Energy
Assuming the 90 days trading horizon Odyssey Energy is expected to generate 3.4 times less return on investment than Jupiter Energy. But when comparing it to its historical volatility, Odyssey Energy is 1.08 times less risky than Jupiter Energy. It trades about 0.03 of its potential returns per unit of risk. Jupiter Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Jupiter Energy on September 5, 2024 and sell it today you would earn a total of 1.10 from holding Jupiter Energy or generate 55.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Odyssey Energy vs. Jupiter Energy
Performance |
| Timeline |
| Odyssey Energy |
| Jupiter Energy |
Odyssey Energy and Jupiter Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odyssey Energy and Jupiter Energy
The main advantage of trading using opposite Odyssey Energy and Jupiter Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odyssey Energy position performs unexpectedly, Jupiter 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 Jupiter Energy will offset losses from the drop in Jupiter Energy's long position.| Odyssey Energy vs. Super Retail Group | Odyssey Energy vs. IDP Education | Odyssey Energy vs. G8 Education | Odyssey Energy vs. Advanced Braking Technology |
| Jupiter Energy vs. Westpac Banking | Jupiter Energy vs. ABACUS STORAGE KING | Jupiter Energy vs. Odyssey Energy | Jupiter Energy vs. Pointsbet Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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