Correlation Between Penta Ocean and SITKA GOLD
Can any of the company-specific risk be diversified away by investing in both Penta Ocean and SITKA GOLD 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 Penta Ocean and SITKA GOLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penta Ocean Construction Co and SITKA GOLD P, you can compare the effects of market volatilities on Penta Ocean and SITKA GOLD 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 Penta Ocean with a short position of SITKA GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Ocean and SITKA GOLD.
Diversification Opportunities for Penta Ocean and SITKA GOLD
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Penta and SITKA is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and SITKA GOLD P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITKA GOLD P and Penta Ocean 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 Penta Ocean Construction Co are associated (or correlated) with SITKA GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITKA GOLD P has no effect on the direction of Penta Ocean i.e., Penta Ocean and SITKA GOLD go up and down completely randomly.
Pair Corralation between Penta Ocean and SITKA GOLD
Assuming the 90 days horizon Penta Ocean is expected to generate 3.98 times less return on investment than SITKA GOLD. But when comparing it to its historical volatility, Penta Ocean Construction Co is 3.09 times less risky than SITKA GOLD. It trades about 0.12 of its potential returns per unit of risk. SITKA GOLD P is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 17.00 in SITKA GOLD P on November 22, 2024 and sell it today you would earn a total of 4.00 from holding SITKA GOLD P or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penta Ocean Construction Co vs. SITKA GOLD P
Performance |
| Timeline |
| Penta Ocean Construc |
| SITKA GOLD P |
Penta Ocean and SITKA GOLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta Ocean and SITKA GOLD
The main advantage of trading using opposite Penta Ocean and SITKA GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta Ocean position performs unexpectedly, SITKA GOLD 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 SITKA GOLD will offset losses from the drop in SITKA GOLD's long position.| Penta Ocean vs. Kingdee International Software | Penta Ocean vs. Aegean Airlines SA | Penta Ocean vs. United Airlines Holdings | Penta Ocean vs. Sunny Optical Technology |
| SITKA GOLD vs. Yuexiu Transport Infrastructure | SITKA GOLD vs. Mitsubishi Materials | SITKA GOLD vs. EVS Broadcast Equipment | SITKA GOLD 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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