Correlation Between Pitney Bowes and Odyssey Marine

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Can any of the company-specific risk be diversified away by investing in both Pitney Bowes and Odyssey Marine 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 Pitney Bowes and Odyssey Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pitney Bowes and Odyssey Marine Exploration, you can compare the effects of market volatilities on Pitney Bowes and Odyssey Marine 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 Pitney Bowes with a short position of Odyssey Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pitney Bowes and Odyssey Marine.

Diversification Opportunities for Pitney Bowes and Odyssey Marine

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Pitney and Odyssey is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Pitney Bowes and Odyssey Marine Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Marine Explo and Pitney Bowes 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 Pitney Bowes are associated (or correlated) with Odyssey Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssey Marine Explo has no effect on the direction of Pitney Bowes i.e., Pitney Bowes and Odyssey Marine go up and down completely randomly.

Pair Corralation between Pitney Bowes and Odyssey Marine

Considering the 90-day investment horizon Pitney Bowes is expected to generate 0.22 times more return on investment than Odyssey Marine. However, Pitney Bowes is 4.48 times less risky than Odyssey Marine. It trades about 0.03 of its potential returns per unit of risk. Odyssey Marine Exploration is currently generating about -0.36 per unit of risk. If you would invest  710.00  in Pitney Bowes on July 21, 2024 and sell it today you would earn a total of  5.00  from holding Pitney Bowes or generate 0.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Pitney Bowes  vs.  Odyssey Marine Exploration

 Performance 
       Timeline  
Pitney Bowes 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Pitney Bowes are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental drivers, Pitney Bowes may actually be approaching a critical reversion point that can send shares even higher in November 2024.
Odyssey Marine Explo 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Odyssey Marine Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak technical and fundamental indicators, Odyssey Marine showed solid returns over the last few months and may actually be approaching a breakup point.

Pitney Bowes and Odyssey Marine Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pitney Bowes and Odyssey Marine

The main advantage of trading using opposite Pitney Bowes and Odyssey Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pitney Bowes position performs unexpectedly, Odyssey Marine 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 Odyssey Marine will offset losses from the drop in Odyssey Marine's long position.
The idea behind Pitney Bowes and Odyssey Marine Exploration 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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