Correlation Between Mammoth Energy and World Oil
Can any of the company-specific risk be diversified away by investing in both Mammoth Energy and World Oil 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 Mammoth Energy and World Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mammoth Energy Services and World Oil Group, you can compare the effects of market volatilities on Mammoth Energy and World Oil 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 Mammoth Energy with a short position of World Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mammoth Energy and World Oil.
Diversification Opportunities for Mammoth Energy and World Oil
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mammoth and World is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mammoth Energy Services and World Oil Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Oil Group and Mammoth 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 Mammoth Energy Services are associated (or correlated) with World Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Oil Group has no effect on the direction of Mammoth Energy i.e., Mammoth Energy and World Oil go up and down completely randomly.
Pair Corralation between Mammoth Energy and World Oil
Given the investment horizon of 90 days Mammoth Energy Services is expected to under-perform the World Oil. But the stock apears to be less risky and, when comparing its historical volatility, Mammoth Energy Services is 3.12 times less risky than World Oil. The stock trades about -0.02 of its potential returns per unit of risk. The World Oil Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.09 in World Oil Group on September 1, 2024 and sell it today you would earn a total of 0.73 from holding World Oil Group or generate 66.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mammoth Energy Services vs. World Oil Group
Performance |
| Timeline |
| Mammoth Energy Services |
| World Oil Group |
Mammoth Energy and World Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mammoth Energy and World Oil
The main advantage of trading using opposite Mammoth Energy and World Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mammoth Energy position performs unexpectedly, World Oil 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 World Oil will offset losses from the drop in World Oil's long position.| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy vs. Compass Diversified Holdings |
| World Oil vs. Flex | World Oil vs. Constellation Brands Class | World Oil vs. Compania Cervecerias Unidas | World Oil vs. Boston Beer |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Global Correlations Find global opportunities by holding instruments from different markets |