Correlation Between Odyssey Energy and Talisman Mining
Can any of the company-specific risk be diversified away by investing in both Odyssey Energy and Talisman Mining 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 Talisman Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odyssey Energy and Talisman Mining, you can compare the effects of market volatilities on Odyssey Energy and Talisman Mining 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 Talisman Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odyssey Energy and Talisman Mining.
Diversification Opportunities for Odyssey Energy and Talisman Mining
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Odyssey and Talisman is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Energy and Talisman Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talisman Mining 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 Talisman Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talisman Mining has no effect on the direction of Odyssey Energy i.e., Odyssey Energy and Talisman Mining go up and down completely randomly.
Pair Corralation between Odyssey Energy and Talisman Mining
Assuming the 90 days trading horizon Odyssey Energy is expected to generate 1.06 times more return on investment than Talisman Mining. However, Odyssey Energy is 1.06 times more volatile than Talisman Mining. It trades about -0.06 of its potential returns per unit of risk. Talisman Mining is currently generating about -0.1 per unit of risk. If you would invest 2.20 in Odyssey Energy on September 1, 2024 and sell it today you would lose (0.20) from holding Odyssey Energy or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Odyssey Energy vs. Talisman Mining
Performance |
| Timeline |
| Odyssey Energy |
| Talisman Mining |
Odyssey Energy and Talisman Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odyssey Energy and Talisman Mining
The main advantage of trading using opposite Odyssey Energy and Talisman Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odyssey Energy position performs unexpectedly, Talisman Mining 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 Talisman Mining will offset losses from the drop in Talisman Mining's long position.| Odyssey Energy vs. MFF Capital Investments | Odyssey Energy vs. Pinnacle Investment Management | Odyssey Energy vs. 29Metals | Odyssey Energy vs. BKI Investment |
| Talisman Mining vs. Northern Star Resources | Talisman Mining vs. Evolution Mining | Talisman Mining vs. Bluescope Steel | Talisman Mining vs. Sandfire Resources NL |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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