Correlation Between Armada Hflr and Odyssey Marine

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

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

Diversification Opportunities for Armada Hflr and Odyssey Marine

0.49

Correlation Coefficient

Armada Hflr  Odyssey Marine

Very weak diversification

The 3 months correlation between Armada and Odyssey is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr 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 Armada Hflr 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 Armada Hflr Pr 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 Armada Hflr i.e., Armada Hflr and Odyssey Marine go up and down completely randomly.

Pair Corralation between Armada Hflr and Odyssey Marine

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Odyssey Marine. But the stock apears to be less risky and, when comparing its historical volatility, Armada Hflr Pr is 22.66 times less risky than Odyssey Marine. The stock trades about -0.09 of its potential returns per unit of risk. The Odyssey Marine Exploration is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  48.00  in Odyssey Marine Exploration on September 13, 2024 and sell it today you would lose (10.90) from holding Odyssey Marine Exploration or give up 22.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Armada Hflr Pr  vs.  Odyssey Marine Exploration

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Odyssey Marine Explo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Odyssey Marine Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Odyssey Marine is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Odyssey Marine

The main advantage of trading using opposite Armada Hflr and Odyssey Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr 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 Armada Hflr Pr 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.