Correlation Between Odyssey Energy and Whitehaven Coal
Can any of the company-specific risk be diversified away by investing in both Odyssey Energy and Whitehaven Coal 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 Whitehaven Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odyssey Energy and Whitehaven Coal, you can compare the effects of market volatilities on Odyssey Energy and Whitehaven Coal 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 Whitehaven Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odyssey Energy and Whitehaven Coal.
Diversification Opportunities for Odyssey Energy and Whitehaven Coal
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Odyssey and Whitehaven is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Energy and Whitehaven Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitehaven Coal 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 Whitehaven Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitehaven Coal has no effect on the direction of Odyssey Energy i.e., Odyssey Energy and Whitehaven Coal go up and down completely randomly.
Pair Corralation between Odyssey Energy and Whitehaven Coal
Assuming the 90 days trading horizon Odyssey Energy is expected to under-perform the Whitehaven Coal. In addition to that, Odyssey Energy is 3.04 times more volatile than Whitehaven Coal. It trades about -0.06 of its total potential returns per unit of risk. Whitehaven Coal is currently generating about -0.1 per unit of volatility. If you would invest 682.00 in Whitehaven Coal on September 12, 2024 and sell it today you would lose (27.00) from holding Whitehaven Coal or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Odyssey Energy vs. Whitehaven Coal
Performance |
| Timeline |
| Odyssey Energy |
| Whitehaven Coal |
Odyssey Energy and Whitehaven Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odyssey Energy and Whitehaven Coal
The main advantage of trading using opposite Odyssey Energy and Whitehaven Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odyssey Energy position performs unexpectedly, Whitehaven Coal 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 Whitehaven Coal will offset losses from the drop in Whitehaven Coal's long position.| Odyssey Energy vs. IDP Education | Odyssey Energy vs. Queste Communications | Odyssey Energy vs. Embark Education Group | Odyssey Energy vs. Spirit Telecom |
| Whitehaven Coal vs. Oneview Healthcare PLC | Whitehaven Coal vs. Black Rock Mining | Whitehaven Coal vs. Epsilon Healthcare | Whitehaven Coal vs. Ramsay Health Care |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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