Correlation Between SQUIRREL MEDIA and PERENNIAL ENERGY
Can any of the company-specific risk be diversified away by investing in both SQUIRREL MEDIA and PERENNIAL 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 SQUIRREL MEDIA and PERENNIAL ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SQUIRREL MEDIA SA and PERENNIAL ENERGY HD 01, you can compare the effects of market volatilities on SQUIRREL MEDIA and PERENNIAL 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 SQUIRREL MEDIA with a short position of PERENNIAL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SQUIRREL MEDIA and PERENNIAL ENERGY.
Diversification Opportunities for SQUIRREL MEDIA and PERENNIAL ENERGY
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SQUIRREL and PERENNIAL is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SQUIRREL MEDIA SA and PERENNIAL ENERGY HD 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PERENNIAL ENERGY and SQUIRREL MEDIA 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 SQUIRREL MEDIA SA are associated (or correlated) with PERENNIAL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PERENNIAL ENERGY has no effect on the direction of SQUIRREL MEDIA i.e., SQUIRREL MEDIA and PERENNIAL ENERGY go up and down completely randomly.
Pair Corralation between SQUIRREL MEDIA and PERENNIAL ENERGY
Assuming the 90 days horizon SQUIRREL MEDIA SA is expected to under-perform the PERENNIAL ENERGY. But the stock apears to be less risky and, when comparing its historical volatility, SQUIRREL MEDIA SA is 2.17 times less risky than PERENNIAL ENERGY. The stock trades about -0.04 of its potential returns per unit of risk. The PERENNIAL ENERGY HD 01 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8.50 in PERENNIAL ENERGY HD 01 on October 16, 2024 and sell it today you would earn a total of 0.95 from holding PERENNIAL ENERGY HD 01 or generate 11.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SQUIRREL MEDIA SA vs. PERENNIAL ENERGY HD 01
Performance |
| Timeline |
| SQUIRREL MEDIA SA |
| PERENNIAL ENERGY |
SQUIRREL MEDIA and PERENNIAL ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SQUIRREL MEDIA and PERENNIAL ENERGY
The main advantage of trading using opposite SQUIRREL MEDIA and PERENNIAL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SQUIRREL MEDIA position performs unexpectedly, PERENNIAL 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 PERENNIAL ENERGY will offset losses from the drop in PERENNIAL ENERGY's long position.| SQUIRREL MEDIA vs. TITAN MACHINERY | SQUIRREL MEDIA vs. Erste Group Bank | SQUIRREL MEDIA vs. Sterling Construction | SQUIRREL MEDIA vs. SUN LIFE FINANCIAL |
| PERENNIAL ENERGY vs. COSMOSTEEL HLDGS | PERENNIAL ENERGY vs. Tencent Music Entertainment | PERENNIAL ENERGY vs. SQUIRREL MEDIA SA | PERENNIAL ENERGY vs. Live Nation Entertainment |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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