Correlation Between American Electric and Penta Ocean
Can any of the company-specific risk be diversified away by investing in both American Electric 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 American Electric and Penta Ocean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Electric Power and Penta Ocean Construction Co, you can compare the effects of market volatilities on American Electric 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 American Electric with a short position of Penta Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Electric and Penta Ocean.
Diversification Opportunities for American Electric and Penta Ocean
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Penta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Electric Power 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 American Electric 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 American Electric Power 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 American Electric i.e., American Electric and Penta Ocean go up and down completely randomly.
Pair Corralation between American Electric and Penta Ocean
If you would invest 366.00 in Penta Ocean Construction Co on September 12, 2024 and sell it today you would earn a total of 30.00 from holding Penta Ocean Construction Co or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
American Electric Power vs. Penta Ocean Construction Co
Performance |
| Timeline |
| American Electric Power |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Penta Ocean Construc |
American Electric and Penta Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Electric and Penta Ocean
The main advantage of trading using opposite American Electric and Penta Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Electric 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.| American Electric vs. Zurich Insurance Group | American Electric vs. Gaztransport Technigaz SA | American Electric vs. BII Railway Transportation | American Electric vs. Goosehead Insurance |
| Penta Ocean vs. Superior Plus Corp | Penta Ocean vs. SIVERS SEMICONDUCTORS AB | Penta Ocean vs. Norsk Hydro ASA | Penta Ocean vs. Reliance Steel Aluminum |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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