Correlation Between Mammoth Energy and VOXX International
Can any of the company-specific risk be diversified away by investing in both Mammoth Energy and VOXX International 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 Mammoth Energy and VOXX International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mammoth Energy Services and VOXX International, you can compare the effects of market volatilities on Mammoth Energy and VOXX International 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 Mammoth Energy with a short position of VOXX International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mammoth Energy and VOXX International.
Diversification Opportunities for Mammoth Energy and VOXX International
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mammoth and VOXX is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mammoth Energy Services and VOXX International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VOXX International and Mammoth 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 Mammoth Energy Services are associated (or correlated) with VOXX International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VOXX International has no effect on the direction of Mammoth Energy i.e., Mammoth Energy and VOXX International go up and down completely randomly.
Pair Corralation between Mammoth Energy and VOXX International
Given the investment horizon of 90 days Mammoth Energy Services is expected to generate 0.76 times more return on investment than VOXX International. However, Mammoth Energy Services is 1.32 times less risky than VOXX International. It trades about -0.29 of its potential returns per unit of risk. VOXX International is currently generating about -0.53 per unit of risk. If you would invest 375.00 in Mammoth Energy Services on February 9, 2024 and sell it today you would lose (64.00) from holding Mammoth Energy Services or give up 17.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mammoth Energy Services vs. VOXX International
Performance |
| Timeline |
| Mammoth Energy Services |
| VOXX International |
Mammoth Energy and VOXX International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mammoth Energy and VOXX International
The main advantage of trading using opposite Mammoth Energy and VOXX International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mammoth Energy position performs unexpectedly, VOXX International 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 VOXX International will offset losses from the drop in VOXX International's long position.| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy vs. Compass Diversified Holdings |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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