Correlation Between ODYSSEY GOLD and Waste Management

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

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

Diversification Opportunities for ODYSSEY GOLD and Waste Management

-0.55

Correlation Coefficient

ODYSSEY GOLD  Waste Management

Excellent diversification

The 3 months correlation between ODYSSEY and Waste is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ODYSSEY GOLD LTD and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management and ODYSSEY GOLD 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 GOLD LTD are associated (or correlated) with Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of ODYSSEY GOLD i.e., ODYSSEY GOLD and Waste Management go up and down completely randomly.

Pair Corralation between ODYSSEY GOLD and Waste Management

Assuming the 90 days horizon ODYSSEY GOLD LTD is expected to generate 14.12 times more return on investment than Waste Management. However, ODYSSEY GOLD is 14.12 times more volatile than Waste Management. It trades about 0.0 of its potential returns per unit of risk. Waste Management is currently generating about -0.5 per unit of risk. If you would invest  0.90  in ODYSSEY GOLD LTD on September 23, 2024 and sell it today you would lose (0.10) from holding ODYSSEY GOLD LTD or give up 11.11% of portfolio value over 90 days.

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

ODYSSEY GOLD LTD  vs.  Waste Management

ODYSSEY GOLD LTD

Risk-Adjusted Performance

0 of 100

Very Weak

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

Waste Management

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Waste Management are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Waste Management may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ODYSSEY GOLD and Waste Management

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

The idea behind ODYSSEY GOLD LTD and Waste 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.