Correlation Between Compagnie Plastic and Penta-Ocean Construction
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic and Penta-Ocean Construction 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 Compagnie Plastic and Penta-Ocean Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and Penta Ocean Construction Co, you can compare the effects of market volatilities on Compagnie Plastic and Penta-Ocean Construction 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 Compagnie Plastic with a short position of Penta-Ocean Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Penta-Ocean Construction.
Diversification Opportunities for Compagnie Plastic and Penta-Ocean Construction
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Compagnie and Penta-Ocean is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Penta Ocean Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta-Ocean Construction and Compagnie Plastic 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 Compagnie Plastic Omnium are associated (or correlated) with Penta-Ocean Construction. 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 Construction has no effect on the direction of Compagnie Plastic i.e., Compagnie Plastic and Penta-Ocean Construction go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Penta-Ocean Construction
Assuming the 90 days horizon Compagnie Plastic is expected to generate 1.01 times less return on investment than Penta-Ocean Construction. In addition to that, Compagnie Plastic is 1.5 times more volatile than Penta Ocean Construction Co. It trades about 0.03 of its total potential returns per unit of risk. Penta Ocean Construction Co is currently generating about 0.05 per unit of volatility. If you would invest 430.00 in Penta Ocean Construction Co on December 11, 2024 and sell it today you would earn a total of 8.00 from holding Penta Ocean Construction Co or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Penta Ocean Construction Co
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Penta-Ocean Construction |
Compagnie Plastic and Penta-Ocean Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Penta-Ocean Construction
The main advantage of trading using opposite Compagnie Plastic and Penta-Ocean Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic position performs unexpectedly, Penta-Ocean Construction 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 Construction will offset losses from the drop in Penta-Ocean Construction's long position.| Compagnie Plastic vs. LG Display Co | Compagnie Plastic vs. British American Tobacco | Compagnie Plastic vs. FAST RETAIL ADR | Compagnie Plastic vs. Japan Tobacco |
| Penta-Ocean Construction vs. Transurban Group | Penta-Ocean Construction vs. Getlink SE | Penta-Ocean Construction vs. Jiangsu Expressway | Penta-Ocean Construction vs. Zhejiang Expressway Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
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