Correlation Between Marine Petroleum and Mirage Energy

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

By analyzing existing cross correlation between Marine Petroleum Trust and Mirage Energy Corp, you can compare the effects of market volatilities on Marine Petroleum and Mirage Energy 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 Marine Petroleum with a short position of Mirage Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Petroleum and Mirage Energy.

Diversification Opportunities for Marine Petroleum and Mirage Energy

-0.19

Correlation Coefficient

Marine Petroleum  Mirage Energy

Good diversification

The 3 months correlation between Marine and Mirage is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Marine Petroleum Trust and Mirage Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirage Energy Corp and Marine Petroleum 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 Marine Petroleum Trust are associated (or correlated) with Mirage Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirage Energy Corp has no effect on the direction of Marine Petroleum i.e., Marine Petroleum and Mirage Energy go up and down completely randomly.

Pair Corralation between Marine Petroleum and Mirage Energy

Assuming the 90 days horizon Marine Petroleum Trust is expected to under-perform the Mirage Energy. But the stock apears to be less risky and, when comparing its historical volatility, Marine Petroleum Trust is 26.96 times less risky than Mirage Energy. The stock trades about 0.0 of its potential returns per unit of risk. The Mirage Energy Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3.40  in Mirage Energy Corp on October 5, 2024 and sell it today you would lose (2.80) from holding Mirage Energy Corp or give up 82.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.68%
Values	Daily Returns

Marine Petroleum Trust  vs.  Mirage Energy Corp

Marine Petroleum Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marine Petroleum Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Mirage Energy Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mirage Energy Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Mirage Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marine Petroleum and Mirage Energy

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

The idea behind Marine Petroleum Trust and Mirage Energy Corp 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 CEOs Directory module to screen CEOs from public companies around the world.