Correlation Between Martin Midstream and Mirage Energy

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

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

Diversification Opportunities for Martin Midstream and Mirage Energy

0.17

Correlation Coefficient

Martin Midstream  Mirage Energy

Average diversification

The 3 months correlation between Martin and Mirage is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Martin Midstream Partners 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 Martin Midstream 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 Martin Midstream Partners 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 Martin Midstream i.e., Martin Midstream and Mirage Energy go up and down completely randomly.

Pair Corralation between Martin Midstream and Mirage Energy

Given the investment horizon of 90 days Martin Midstream Partners is expected to under-perform the Mirage Energy. But the stock apears to be less risky and, when comparing its historical volatility, Martin Midstream Partners is 102.39 times less risky than Mirage Energy. The stock trades about -0.19 of its potential returns per unit of risk. The Mirage Energy Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Mirage Energy Corp on September 30, 2024 and sell it today you would lose (3.40) from holding Mirage Energy Corp or give up 85.0% of portfolio value over 90 days.

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

Martin Midstream Partners  vs.  Mirage Energy Corp

Martin Midstream Partners

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Martin Midstream Partners are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable essential indicators, Martin Midstream is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail 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 Martin Midstream and Mirage Energy

The main advantage of trading using opposite Martin Midstream and Mirage Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Midstream 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 Martin Midstream Partners 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.