Correlation Between Odyssey Energy and Clime Investment

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

By analyzing existing cross correlation between Odyssey Energy and Clime Investment Management, you can compare the effects of market volatilities on Odyssey Energy and Clime Investment 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 Clime Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odyssey Energy and Clime Investment.

Diversification Opportunities for Odyssey Energy and Clime Investment

0.35

Correlation Coefficient

Odyssey Energy  Clime Investment

Weak diversification

The 3 months correlation between Odyssey and Clime is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Energy and Clime Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clime Investment Man 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 Clime Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clime Investment Man has no effect on the direction of Odyssey Energy i.e., Odyssey Energy and Clime Investment go up and down completely randomly.

Pair Corralation between Odyssey Energy and Clime Investment

Assuming the 90 days trading horizon Odyssey Energy is expected to generate 2.36 times more return on investment than Clime Investment. However, Odyssey Energy is 2.36 times more volatile than Clime Investment Management. It trades about 0.1 of its potential returns per unit of risk. Clime Investment Management is currently generating about -0.03 per unit of risk. If you would invest  1.80  in Odyssey Energy on December 27, 2024 and sell it today you would earn a total of  0.50  from holding Odyssey Energy or generate 27.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Odyssey Energy  vs.  Clime Investment Management

Odyssey Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Odyssey Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Odyssey Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Clime Investment Man

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clime Investment Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Clime Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Odyssey Energy and Clime Investment

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

The idea behind Odyssey Energy and Clime Investment Management 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.