Correlation Between Magellan Energy and Montello Resources

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

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

Diversification Opportunities for Magellan Energy and Montello Resources

0.0

Correlation Coefficient

Magellan Energy  Montello Resources

Pay attention - limited upside

The 3 months correlation between Magellan and Montello is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Energy and Montello Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montello Resources and Magellan 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 Magellan Energy are associated (or correlated) with Montello Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montello Resources has no effect on the direction of Magellan Energy i.e., Magellan Energy and Montello Resources go up and down completely randomly.

Pair Corralation between Magellan Energy and Montello Resources

If you would invest  0.00  in Magellan Energy on September 13, 2025 and sell it today you would earn a total of  0.00  from holding Magellan Energy or generate 0.0% return on investment over 90 days.

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

Magellan Energy  vs.  Montello Resources

Magellan Energy

Risk-Adjusted Performance

Fair

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

Montello Resources

Risk-Adjusted Performance

Weakest

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

Pair Trading with Magellan Energy and Montello Resources

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

The idea behind Magellan Energy and Montello Resources 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.