Correlation Between DATA Communications and Odyssey Marine

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

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

Diversification Opportunities for DATA Communications and Odyssey Marine

-0.01

Correlation Coefficient

DATA Communications  Odyssey Marine

Good diversification

The 3 months correlation between DATA and Odyssey is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding DATA Communications Management 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 DATA Communications 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 DATA Communications Management 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 DATA Communications i.e., DATA Communications and Odyssey Marine go up and down completely randomly.

Pair Corralation between DATA Communications and Odyssey Marine

Assuming the 90 days horizon DATA Communications is expected to generate 4.44 times less return on investment than Odyssey Marine. But when comparing it to its historical volatility, DATA Communications Management is 1.77 times less risky than Odyssey Marine. It trades about 0.03 of its potential returns per unit of risk. Odyssey Marine Exploration is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Odyssey Marine Exploration on December 20, 2024 and sell it today you would earn a total of  6.00  from holding Odyssey Marine Exploration or generate 16.67% return on investment over 90 days.

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

DATA Communications Management  vs.  Odyssey Marine Exploration

DATA Communications

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DATA Communications Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, DATA Communications may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Odyssey Marine Explo

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Odyssey Marine Exploration are ranked lower than 5 (%) 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 DATA Communications and Odyssey Marine

The main advantage of trading using opposite DATA Communications and Odyssey Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATA Communications 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 DATA Communications Management 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.