Correlation Between Odyssey Marine and Aramark Holdings

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

By analyzing existing cross correlation between Odyssey Marine Exploration and Aramark Holdings, you can compare the effects of market volatilities on Odyssey Marine and Aramark Holdings 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 Marine with a short position of Aramark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odyssey Marine and Aramark Holdings.

Diversification Opportunities for Odyssey Marine and Aramark Holdings

-0.43

Correlation Coefficient

Odyssey Marine  Aramark Holdings

Very good diversification

The 3 months correlation between Odyssey and Aramark is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Marine Exploration and Aramark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aramark Holdings and Odyssey Marine 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 Marine Exploration are associated (or correlated) with Aramark Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aramark Holdings has no effect on the direction of Odyssey Marine i.e., Odyssey Marine and Aramark Holdings go up and down completely randomly.

Pair Corralation between Odyssey Marine and Aramark Holdings

Given the investment horizon of 90 days Odyssey Marine Exploration is expected to generate 6.52 times more return on investment than Aramark Holdings. However, Odyssey Marine is 6.52 times more volatile than Aramark Holdings. It trades about 0.03 of its potential returns per unit of risk. Aramark Holdings is currently generating about 0.03 per unit of risk. If you would invest  317.00  in Odyssey Marine Exploration on October 11, 2024 and sell it today you would lose (250.00) from holding Odyssey Marine Exploration or give up 78.86% of portfolio value over 90 days.

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

Odyssey Marine Exploration  vs.  Aramark Holdings

Odyssey Marine Explo

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Odyssey Marine Exploration are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Odyssey Marine showed solid returns over the last few months and may actually be approaching a breakup point.

Aramark Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aramark Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Aramark Holdings is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Odyssey Marine and Aramark Holdings

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

The idea behind Odyssey Marine Exploration and Aramark Holdings 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.