Correlation Between Poseidon Nickel and Golden Energy

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

By analyzing existing cross correlation between Poseidon Nickel Limited and Golden Energy Offshore, you can compare the effects of market volatilities on Poseidon Nickel and Golden Energy 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 Poseidon Nickel with a short position of Golden Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poseidon Nickel and Golden Energy.

Diversification Opportunities for Poseidon Nickel and Golden Energy

0.13

Correlation Coefficient

Poseidon Nickel  Golden Energy

Average diversification

The 3 months correlation between Poseidon and Golden is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Poseidon Nickel Limited and Golden Energy Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Energy Offshore and Poseidon Nickel 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 Poseidon Nickel Limited are associated (or correlated) with Golden Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Energy Offshore has no effect on the direction of Poseidon Nickel i.e., Poseidon Nickel and Golden Energy go up and down completely randomly.

Pair Corralation between Poseidon Nickel and Golden Energy

If you would invest  14.00  in Golden Energy Offshore on January 24, 2024 and sell it today you would earn a total of  0.00  from holding Golden Energy Offshore or generate 0.0% return on investment over 90 days.

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

Poseidon Nickel Limited  vs.  Golden Energy Offshore

Poseidon Nickel

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Poseidon Nickel Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Poseidon Nickel reported solid returns over the last few months and may actually be approaching a breakup point.

Golden Energy Offshore

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Poseidon Nickel and Golden Energy

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

The idea behind Poseidon Nickel Limited and Golden Energy Offshore 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.