Correlation Between Penta-Ocean Construction and ALLEGROEU
Can any of the company-specific risk be diversified away by investing in both Penta-Ocean Construction and ALLEGROEU 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 ALLEGROEU 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 ALLEGROEU ZY 01, you can compare the effects of market volatilities on Penta-Ocean Construction and ALLEGROEU 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 ALLEGROEU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta-Ocean Construction and ALLEGROEU.
Diversification Opportunities for Penta-Ocean Construction and ALLEGROEU
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Penta-Ocean and ALLEGROEU is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and ALLEGROEU ZY 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLEGROEU ZY 01 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 ALLEGROEU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLEGROEU ZY 01 has no effect on the direction of Penta-Ocean Construction i.e., Penta-Ocean Construction and ALLEGROEU go up and down completely randomly.
Pair Corralation between Penta-Ocean Construction and ALLEGROEU
Assuming the 90 days horizon Penta Ocean Construction Co is expected to generate 0.74 times more return on investment than ALLEGROEU. However, Penta Ocean Construction Co is 1.35 times less risky than ALLEGROEU. It trades about 0.18 of its potential returns per unit of risk. ALLEGROEU ZY 01 is currently generating about 0.01 per unit of risk. If you would invest 378.00 in Penta Ocean Construction Co on October 21, 2024 and sell it today you would earn a total of 14.00 from holding Penta Ocean Construction Co or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penta Ocean Construction Co vs. ALLEGROEU ZY 01
Performance |
| Timeline |
| Penta-Ocean Construction |
| ALLEGROEU ZY 01 |
Penta-Ocean Construction and ALLEGROEU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta-Ocean Construction and ALLEGROEU
The main advantage of trading using opposite Penta-Ocean Construction and ALLEGROEU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta-Ocean Construction position performs unexpectedly, ALLEGROEU 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 ALLEGROEU will offset losses from the drop in ALLEGROEU's long position.| Penta-Ocean Construction vs. THAI BEVERAGE | Penta-Ocean Construction vs. Coor Service Management | Penta-Ocean Construction vs. Elmos Semiconductor SE | Penta-Ocean Construction vs. GWILLI FOOD |
| ALLEGROEU vs. Penta Ocean Construction Co | ALLEGROEU vs. Digilife Technologies Limited | ALLEGROEU vs. Agilent Technologies | ALLEGROEU vs. GLG LIFE TECH |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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