Correlation Between INTERNATIONAL ENERGY and MULTIVERSE MINING

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

By analyzing existing cross correlation between INTERNATIONAL ENERGY INSURANCE and MULTIVERSE MINING AND, you can compare the effects of market volatilities on INTERNATIONAL ENERGY and MULTIVERSE MINING 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 INTERNATIONAL ENERGY with a short position of MULTIVERSE MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERNATIONAL ENERGY and MULTIVERSE MINING.

Diversification Opportunities for INTERNATIONAL ENERGY and MULTIVERSE MINING

0.53

Correlation Coefficient

INTERNATIONAL ENERGY  MULTIVERSE MINING

Very weak diversification

The 3 months correlation between INTERNATIONAL and MULTIVERSE is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding INTERNATIONAL ENERGY INSURANCE and MULTIVERSE MINING AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MULTIVERSE MINING AND and INTERNATIONAL 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 INTERNATIONAL ENERGY INSURANCE are associated (or correlated) with MULTIVERSE MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MULTIVERSE MINING AND has no effect on the direction of INTERNATIONAL ENERGY i.e., INTERNATIONAL ENERGY and MULTIVERSE MINING go up and down completely randomly.

Pair Corralation between INTERNATIONAL ENERGY and MULTIVERSE MINING

Assuming the 90 days trading horizon INTERNATIONAL ENERGY INSURANCE is expected to generate 0.95 times more return on investment than MULTIVERSE MINING. However, INTERNATIONAL ENERGY INSURANCE is 1.05 times less risky than MULTIVERSE MINING. It trades about -0.03 of its potential returns per unit of risk. MULTIVERSE MINING AND is currently generating about -0.34 per unit of risk. If you would invest  158.00  in INTERNATIONAL ENERGY INSURANCE on September 15, 2024 and sell it today you would lose (11.00) from holding INTERNATIONAL ENERGY INSURANCE or give up 6.96% of portfolio value over 90 days.

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

INTERNATIONAL ENERGY INSURANCE  vs.  MULTIVERSE MINING AND

INTERNATIONAL ENERGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTERNATIONAL ENERGY INSURANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, INTERNATIONAL ENERGY is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

MULTIVERSE MINING AND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MULTIVERSE MINING AND has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with INTERNATIONAL ENERGY and MULTIVERSE MINING

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

The idea behind INTERNATIONAL ENERGY INSURANCE and MULTIVERSE MINING AND 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.