Correlation Between Iron and ODIN Investments

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

By analyzing existing cross correlation between Iron And Steel and ODIN Investments, you can compare the effects of market volatilities on Iron and ODIN Investments 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 Iron with a short position of ODIN Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron and ODIN Investments.

Diversification Opportunities for Iron and ODIN Investments

-0.04

Correlation Coefficient

Iron  ODIN Investments

Good diversification

The 3 months correlation between Iron and ODIN is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Iron And Steel and ODIN Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODIN Investments and Iron 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 Iron And Steel are associated (or correlated) with ODIN Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODIN Investments has no effect on the direction of Iron i.e., Iron and ODIN Investments go up and down completely randomly.

Pair Corralation between Iron and ODIN Investments

Assuming the 90 days trading horizon Iron And Steel is expected to generate 1.58 times more return on investment than ODIN Investments. However, Iron is 1.58 times more volatile than ODIN Investments. It trades about 0.11 of its potential returns per unit of risk. ODIN Investments is currently generating about -0.01 per unit of risk. If you would invest  148.00  in Iron And Steel on September 17, 2024 and sell it today you would earn a total of  277.00  from holding Iron And Steel or generate 187.16% return on investment over 90 days.

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

Iron And Steel  vs.  ODIN Investments

Iron And Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iron And Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ODIN Investments

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ODIN Investments are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, ODIN Investments may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Iron and ODIN Investments

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

The idea behind Iron And Steel and ODIN Investments 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.