Correlation Between Total Helium and Methanex

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

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

Diversification Opportunities for Total Helium and Methanex

0.29

Correlation Coefficient

Total Helium  Methanex

Modest diversification

The 3 months correlation between Total and Methanex is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Total Helium and Methanex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methanex and Total Helium 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 Total Helium are associated (or correlated) with Methanex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methanex has no effect on the direction of Total Helium i.e., Total Helium and Methanex go up and down completely randomly.

Pair Corralation between Total Helium and Methanex

Assuming the 90 days horizon Total Helium is expected to generate 6.18 times more return on investment than Methanex. However, Total Helium is 6.18 times more volatile than Methanex. It trades about 0.01 of its potential returns per unit of risk. Methanex is currently generating about 0.01 per unit of risk. If you would invest  44.00  in Total Helium on December 4, 2024 and sell it today you would lose (42.50) from holding Total Helium or give up 96.59% of portfolio value over 90 days.

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

Total Helium  vs.  Methanex

Total Helium

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Total Helium are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Total Helium showed solid returns over the last few months and may actually be approaching a breakup point.

Methanex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Methanex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Total Helium and Methanex

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

The idea behind Total Helium and Methanex 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.