Correlation Between Steel Partners and Mammoth Energy
Can any of the company-specific risk be diversified away by investing in both Steel Partners and Mammoth 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 Steel Partners and Mammoth Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Partners Holdings and Mammoth Energy Services, you can compare the effects of market volatilities on Steel Partners and Mammoth 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 Steel Partners with a short position of Mammoth Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Partners and Mammoth Energy.
Diversification Opportunities for Steel Partners and Mammoth Energy
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Steel and Mammoth is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Steel Partners Holdings and Mammoth Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Energy Services and Steel Partners 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 Steel Partners Holdings are associated (or correlated) with Mammoth Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Energy Services has no effect on the direction of Steel Partners i.e., Steel Partners and Mammoth Energy go up and down completely randomly.
Pair Corralation between Steel Partners and Mammoth Energy
Assuming the 90 days trading horizon Steel Partners is expected to generate 19.36 times less return on investment than Mammoth Energy. But when comparing it to its historical volatility, Steel Partners Holdings is 18.61 times less risky than Mammoth Energy. It trades about 0.23 of its potential returns per unit of risk. Mammoth Energy Services is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 282.00 in Mammoth Energy Services on October 20, 2024 and sell it today you would earn a total of 52.00 from holding Mammoth Energy Services or generate 18.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Partners Holdings vs. Mammoth Energy Services
Performance |
| Timeline |
| Steel Partners Holdings |
| Mammoth Energy Services |
Steel Partners and Mammoth Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Partners and Mammoth Energy
The main advantage of trading using opposite Steel Partners and Mammoth Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Partners position performs unexpectedly, Mammoth 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 Mammoth Energy will offset losses from the drop in Mammoth Energy's long position.| Steel Partners vs. Compass Diversified | Steel Partners vs. Brookfield Business Partners | Steel Partners vs. Matthews International | Steel Partners vs. Tejon Ranch Co |
| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy vs. Compass Diversified 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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