Correlation Between Chuangs China and Penta Ocean
Can any of the company-specific risk be diversified away by investing in both Chuangs China 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 Chuangs China and Penta Ocean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and Penta Ocean Construction Co, you can compare the effects of market volatilities on Chuangs China 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 Chuangs China with a short position of Penta Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and Penta Ocean.
Diversification Opportunities for Chuangs China and Penta Ocean
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chuangs and Penta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments 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 Chuangs China 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 Chuangs China Investments 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 Chuangs China i.e., Chuangs China and Penta Ocean go up and down completely randomly.
Pair Corralation between Chuangs China and Penta Ocean
If you would invest 400.00 in Penta Ocean Construction Co on November 7, 2024 and sell it today you would earn a total of 0.00 from holding Penta Ocean Construction Co 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 |
Chuangs China Investments vs. Penta Ocean Construction Co
Performance |
| Timeline |
| Chuangs China Investments |
| Penta Ocean Construc |
Chuangs China and Penta Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and Penta Ocean
The main advantage of trading using opposite Chuangs China and Penta Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China 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.| Chuangs China vs. Sun Hung Kai | Chuangs China vs. China Overseas Land | Chuangs China vs. CHINA VANKE TD | Chuangs China vs. Longfor Group Holdings |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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