Correlation Between Penta-Ocean Construction and INTER CARS
Can any of the company-specific risk be diversified away by investing in both Penta-Ocean Construction and INTER CARS 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 Construction and INTER CARS 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 INTER CARS SA, you can compare the effects of market volatilities on Penta-Ocean Construction and INTER CARS 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 Construction with a short position of INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta-Ocean Construction and INTER CARS.
Diversification Opportunities for Penta-Ocean Construction and INTER CARS
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Penta-Ocean and INTER is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA and Penta-Ocean Construction 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 INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of Penta-Ocean Construction i.e., Penta-Ocean Construction and INTER CARS go up and down completely randomly.
Pair Corralation between Penta-Ocean Construction and INTER CARS
Assuming the 90 days horizon Penta Ocean Construction Co is expected to under-perform the INTER CARS. But the stock apears to be less risky and, when comparing its historical volatility, Penta Ocean Construction Co is 1.23 times less risky than INTER CARS. The stock trades about -0.05 of its potential returns per unit of risk. The INTER CARS SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 13,521 in INTER CARS SA on September 4, 2024 and sell it today you would lose (2,321) from holding INTER CARS SA or give up 17.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Penta Ocean Construction Co vs. INTER CARS SA
Performance |
| Timeline |
| Penta-Ocean Construction |
| INTER CARS SA |
Penta-Ocean Construction and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta-Ocean Construction and INTER CARS
The main advantage of trading using opposite Penta-Ocean Construction and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta-Ocean Construction position performs unexpectedly, INTER CARS 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 INTER CARS will offset losses from the drop in INTER CARS's long position.| Penta-Ocean Construction vs. Transurban Group | Penta-Ocean Construction vs. Superior Plus Corp | Penta-Ocean Construction vs. NMI Holdings | Penta-Ocean Construction vs. Origin Agritech |
| INTER CARS vs. PT Astra International | INTER CARS vs. Superior Plus Corp | INTER CARS vs. NMI Holdings | INTER CARS vs. Origin Agritech |
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.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |