Correlation Between COFCO Joycome and Penta Ocean
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and Penta Ocean 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 COFCO Joycome and Penta Ocean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and Penta Ocean Construction Co, you can compare the effects of market volatilities on COFCO Joycome and Penta Ocean 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 COFCO Joycome with a short position of Penta Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and Penta Ocean.
Diversification Opportunities for COFCO Joycome and Penta Ocean
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COFCO and Penta is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and Penta Ocean Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta Ocean Construc and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with Penta Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta Ocean Construc has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and Penta Ocean go up and down completely randomly.
Pair Corralation between COFCO Joycome and Penta Ocean
Assuming the 90 days horizon COFCO Joycome is expected to generate 5.17 times less return on investment than Penta Ocean. In addition to that, COFCO Joycome is 1.87 times more volatile than Penta Ocean Construction Co. It trades about 0.01 of its total potential returns per unit of risk. Penta Ocean Construction Co is currently generating about 0.11 per unit of volatility. If you would invest 376.00 in Penta Ocean Construction Co on October 30, 2024 and sell it today you would earn a total of 20.00 from holding Penta Ocean Construction Co or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. Penta Ocean Construction Co
Performance |
| Timeline |
| COFCO Joycome Foods |
| Penta Ocean Construc |
COFCO Joycome and Penta Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and Penta Ocean
The main advantage of trading using opposite COFCO Joycome and Penta Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, Penta Ocean 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 Penta Ocean will offset losses from the drop in Penta Ocean's long position.| COFCO Joycome vs. General Mills | COFCO Joycome vs. Danone SA | COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Kellogg Company |
| Penta Ocean vs. Nishi Nippon Railroad Co | Penta Ocean vs. United Airlines Holdings | Penta Ocean vs. NAGOYA RAILROAD | Penta Ocean vs. Transport International Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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