Correlation Between Odyssey Energy and Brookside Energy
Can any of the company-specific risk be diversified away by investing in both Odyssey Energy and Brookside 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 Odyssey Energy and Brookside Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odyssey Energy and Brookside Energy, you can compare the effects of market volatilities on Odyssey Energy and Brookside 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 Odyssey Energy with a short position of Brookside Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odyssey Energy and Brookside Energy.
Diversification Opportunities for Odyssey Energy and Brookside Energy
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Odyssey and Brookside is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Energy and Brookside Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookside Energy and Odyssey Energy 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 Odyssey Energy are associated (or correlated) with Brookside Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookside Energy has no effect on the direction of Odyssey Energy i.e., Odyssey Energy and Brookside Energy go up and down completely randomly.
Pair Corralation between Odyssey Energy and Brookside Energy
Assuming the 90 days trading horizon Odyssey Energy is expected to generate 2.63 times more return on investment than Brookside Energy. However, Odyssey Energy is 2.63 times more volatile than Brookside Energy. It trades about -0.1 of its potential returns per unit of risk. Brookside Energy is currently generating about -0.31 per unit of risk. If you would invest 2.00 in Odyssey Energy on September 25, 2024 and sell it today you would lose (0.20) from holding Odyssey Energy or give up 10.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Odyssey Energy vs. Brookside Energy
Performance |
Timeline |
Odyssey Energy |
Brookside Energy |
Odyssey Energy and Brookside Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Odyssey Energy and Brookside Energy
The main advantage of trading using opposite Odyssey Energy and Brookside Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odyssey Energy position performs unexpectedly, Brookside 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 Brookside Energy will offset losses from the drop in Brookside Energy's long position.Odyssey Energy vs. Westpac Banking | Odyssey Energy vs. ABACUS STORAGE KING | Odyssey Energy vs. Bendigo And Adelaide | Odyssey Energy vs. De Grey Mining |
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Check out your portfolio center.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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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