Correlation Between Penta Ocean and SHIP HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Penta Ocean and SHIP HEALTHCARE 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 SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC, you can compare the effects of market volatilities on Penta Ocean and SHIP HEALTHCARE 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 SHIP HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Ocean and SHIP HEALTHCARE.
Diversification Opportunities for Penta Ocean and SHIP HEALTHCARE
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Penta and SHIP is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of Penta Ocean i.e., Penta Ocean and SHIP HEALTHCARE go up and down completely randomly.
Pair Corralation between Penta Ocean and SHIP HEALTHCARE
Assuming the 90 days horizon Penta Ocean is expected to generate 2.15 times less return on investment than SHIP HEALTHCARE. In addition to that, Penta Ocean is 1.13 times more volatile than SHIP HEALTHCARE HLDGINC. It trades about 0.1 of its total potential returns per unit of risk. SHIP HEALTHCARE HLDGINC is currently generating about 0.24 per unit of volatility. If you would invest 1,260 in SHIP HEALTHCARE HLDGINC on September 13, 2024 and sell it today you would earn a total of 90.00 from holding SHIP HEALTHCARE HLDGINC or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Penta Ocean Construction Co vs. SHIP HEALTHCARE HLDGINC
Performance |
| Timeline |
| Penta Ocean Construc |
| SHIP HEALTHCARE HLDGINC |
Penta Ocean and SHIP HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta Ocean and SHIP HEALTHCARE
The main advantage of trading using opposite Penta Ocean and SHIP HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta Ocean position performs unexpectedly, SHIP HEALTHCARE 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 SHIP HEALTHCARE will offset losses from the drop in SHIP HEALTHCARE's long position.| Penta Ocean vs. Superior Plus Corp | Penta Ocean vs. SIVERS SEMICONDUCTORS AB | Penta Ocean vs. Norsk Hydro ASA | Penta Ocean vs. Reliance Steel Aluminum |
| SHIP HEALTHCARE vs. Superior Plus Corp | SHIP HEALTHCARE vs. NMI Holdings | SHIP HEALTHCARE vs. SIVERS SEMICONDUCTORS AB | SHIP HEALTHCARE vs. NorAm Drilling AS |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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