Correlation Between Penta Ocean and BORR DRILLING
Can any of the company-specific risk be diversified away by investing in both Penta Ocean and BORR DRILLING 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 BORR DRILLING 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 BORR DRILLING NEW, you can compare the effects of market volatilities on Penta Ocean and BORR DRILLING 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 BORR DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Ocean and BORR DRILLING.
Diversification Opportunities for Penta Ocean and BORR DRILLING
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Penta and BORR is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and BORR DRILLING NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BORR DRILLING NEW 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 BORR DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BORR DRILLING NEW has no effect on the direction of Penta Ocean i.e., Penta Ocean and BORR DRILLING go up and down completely randomly.
Pair Corralation between Penta Ocean and BORR DRILLING
Assuming the 90 days horizon Penta Ocean Construction Co is expected to generate 0.26 times more return on investment than BORR DRILLING. However, Penta Ocean Construction Co is 3.87 times less risky than BORR DRILLING. It trades about 0.19 of its potential returns per unit of risk. BORR DRILLING NEW is currently generating about -0.01 per unit of risk. If you would invest 380.00 in Penta Ocean Construction Co on October 22, 2024 and sell it today you would earn a total of 14.00 from holding Penta Ocean Construction Co or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penta Ocean Construction Co vs. BORR DRILLING NEW
Performance |
| Timeline |
| Penta Ocean Construc |
| BORR DRILLING NEW |
Penta Ocean and BORR DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta Ocean and BORR DRILLING
The main advantage of trading using opposite Penta Ocean and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta Ocean position performs unexpectedly, BORR DRILLING 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 BORR DRILLING will offset losses from the drop in BORR DRILLING's long position.| Penta Ocean vs. Charter Communications | Penta Ocean vs. Zoom Video Communications | Penta Ocean vs. COSMOSTEEL HLDGS | Penta Ocean vs. ANGANG STEEL H |
| BORR DRILLING vs. Casio Computer CoLtd | BORR DRILLING vs. Tokyu Construction Co | BORR DRILLING vs. Penta Ocean Construction Co | BORR DRILLING vs. CRISPR Therapeutics AG |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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