Correlation Between SEVEN GROUP and Odyssey Energy
Can any of the company-specific risk be diversified away by investing in both SEVEN GROUP and Odyssey 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 SEVEN GROUP and Odyssey Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEVEN GROUP HOLDINGS and Odyssey Energy, you can compare the effects of market volatilities on SEVEN GROUP and Odyssey 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 SEVEN GROUP with a short position of Odyssey Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEVEN GROUP and Odyssey Energy.
Diversification Opportunities for SEVEN GROUP and Odyssey Energy
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SEVEN and Odyssey is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SEVEN GROUP HOLDINGS and Odyssey Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Energy and SEVEN GROUP 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 SEVEN GROUP HOLDINGS are associated (or correlated) with Odyssey Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssey Energy has no effect on the direction of SEVEN GROUP i.e., SEVEN GROUP and Odyssey Energy go up and down completely randomly.
Pair Corralation between SEVEN GROUP and Odyssey Energy
Assuming the 90 days trading horizon SEVEN GROUP HOLDINGS is expected to under-perform the Odyssey Energy. But the stock apears to be less risky and, when comparing its historical volatility, SEVEN GROUP HOLDINGS is 5.22 times less risky than Odyssey Energy. The stock trades about -0.31 of its potential returns per unit of risk. The Odyssey Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.70 in Odyssey Energy on November 8, 2024 and sell it today you would earn a total of 0.10 from holding Odyssey Energy or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 47.62% |
| Values | Daily Returns |
SEVEN GROUP HOLDINGS vs. Odyssey Energy
Performance |
| Timeline |
| SEVEN GROUP HOLDINGS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Odyssey Energy |
SEVEN GROUP and Odyssey Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEVEN GROUP and Odyssey Energy
The main advantage of trading using opposite SEVEN GROUP and Odyssey Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEVEN GROUP position performs unexpectedly, Odyssey 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 Odyssey Energy will offset losses from the drop in Odyssey Energy's long position.| SEVEN GROUP vs. Red Hill Iron | SEVEN GROUP vs. Tombador Iron | SEVEN GROUP vs. Phoslock Environmental Technologies | SEVEN GROUP vs. Centaurus Metals |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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