Correlation Between All American and Odyssey Marine

Can any of the company-specific risk be diversified away by investing in both All American and Odyssey Marine 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 All American and Odyssey Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between All American Pet and Odyssey Marine Exploration, you can compare the effects of market volatilities on All American and Odyssey Marine 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 All American with a short position of Odyssey Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of All American and Odyssey Marine.

Diversification Opportunities for All American and Odyssey Marine

-0.68

Correlation Coefficient

All American  Odyssey Marine

Excellent diversification

The 3 months correlation between All and Odyssey is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding All American Pet and Odyssey Marine Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Marine Explo and All American 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 All American Pet are associated (or correlated) with Odyssey Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssey Marine Explo has no effect on the direction of All American i.e., All American and Odyssey Marine go up and down completely randomly.

Pair Corralation between All American and Odyssey Marine

Given the investment horizon of 90 days All American Pet is expected to under-perform the Odyssey Marine. In addition to that, All American is 2.48 times more volatile than Odyssey Marine Exploration. It trades about -0.24 of its total potential returns per unit of risk. Odyssey Marine Exploration is currently generating about 0.31 per unit of volatility. If you would invest  40.00  in Odyssey Marine Exploration on October 25, 2024 and sell it today you would earn a total of  24.00  from holding Odyssey Marine Exploration or generate 60.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

All American Pet  vs.  Odyssey Marine Exploration

All American Pet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days All American Pet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Odyssey Marine Explo

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Odyssey Marine Exploration are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Odyssey Marine showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with All American and Odyssey Marine

The main advantage of trading using opposite All American and Odyssey Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All American position performs unexpectedly, Odyssey Marine 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 Marine will offset losses from the drop in Odyssey Marine's long position.

The idea behind All American Pet and Odyssey Marine Exploration pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.