Correlation Between Eco Innovation and Odyssey Marine

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

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

Diversification Opportunities for Eco Innovation and Odyssey Marine

-0.27

Correlation Coefficient

Eco Innovation  Odyssey Marine

Very good diversification

The 3 months correlation between Eco and Odyssey is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eco Innovation Group 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 Eco Innovation 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 Eco Innovation Group 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 Eco Innovation i.e., Eco Innovation and Odyssey Marine go up and down completely randomly.

Pair Corralation between Eco Innovation and Odyssey Marine

Given the investment horizon of 90 days Eco Innovation Group is expected to generate 30.51 times more return on investment than Odyssey Marine. However, Eco Innovation is 30.51 times more volatile than Odyssey Marine Exploration. It trades about 0.2 of its potential returns per unit of risk. Odyssey Marine Exploration is currently generating about 0.08 per unit of risk. If you would invest  0.01  in Eco Innovation Group on December 19, 2024 and sell it today you would earn a total of  0.00  from holding Eco Innovation Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Eco Innovation Group  vs.  Odyssey Marine Exploration

Eco Innovation Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eco Innovation Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Eco Innovation showed solid returns over the last few months and may actually be approaching a breakup point.

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 Eco Innovation and Odyssey Marine

The main advantage of trading using opposite Eco Innovation and Odyssey Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eco Innovation 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 Eco Innovation Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..