Correlation Between Odyssey Energy and Midway
Can any of the company-specific risk be diversified away by investing in both Odyssey Energy and Midway 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 Midway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odyssey Energy and Midway, you can compare the effects of market volatilities on Odyssey Energy and Midway 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 Midway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odyssey Energy and Midway.
Diversification Opportunities for Odyssey Energy and Midway
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Odyssey and Midway is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Energy and Midway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midway 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 Midway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midway has no effect on the direction of Odyssey Energy i.e., Odyssey Energy and Midway go up and down completely randomly.
Pair Corralation between Odyssey Energy and Midway
Assuming the 90 days trading horizon Odyssey Energy is expected to under-perform the Midway. But the stock apears to be less risky and, when comparing its historical volatility, Odyssey Energy is 2.54 times less risky than Midway. The stock trades about -0.06 of its potential returns per unit of risk. The Midway is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 80.00 in Midway on September 1, 2024 and sell it today you would earn a total of 45.00 from holding Midway or generate 56.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Odyssey Energy vs. Midway
Performance |
| Timeline |
| Odyssey Energy |
| Midway |
Odyssey Energy and Midway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odyssey Energy and Midway
The main advantage of trading using opposite Odyssey Energy and Midway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odyssey Energy position performs unexpectedly, Midway 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 Midway will offset losses from the drop in Midway's long position.| Odyssey Energy vs. MFF Capital Investments | Odyssey Energy vs. Pinnacle Investment Management | Odyssey Energy vs. 29Metals | Odyssey Energy vs. BKI Investment |
| Midway vs. Hudson Investment Group | Midway vs. EMvision Medical Devices | Midway vs. REGAL ASIAN INVESTMENTS | Midway vs. Carlton Investments |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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