Correlation Between ODIN Investments and Iron

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

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

Diversification Opportunities for ODIN Investments and Iron

0.58

Correlation Coefficient

ODIN Investments  Iron

Very weak diversification

The 3 months correlation between ODIN and Iron is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ODIN Investments and Iron And Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron And Steel and ODIN Investments 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 ODIN Investments are associated (or correlated) with Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron And Steel has no effect on the direction of ODIN Investments i.e., ODIN Investments and Iron go up and down completely randomly.

Pair Corralation between ODIN Investments and Iron

Assuming the 90 days trading horizon ODIN Investments is expected to under-perform the Iron. In addition to that, ODIN Investments is 1.25 times more volatile than Iron And Steel. It trades about -0.07 of its total potential returns per unit of risk. Iron And Steel is currently generating about 0.06 per unit of volatility. If you would invest  397.00  in Iron And Steel on October 26, 2024 and sell it today you would earn a total of  6.00  from holding Iron And Steel or generate 1.51% return on investment over 90 days.

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

ODIN Investments  vs.  Iron And Steel

ODIN Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ODIN Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ODIN Investments and Iron

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

The idea behind ODIN Investments and Iron And Steel 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.