Correlation Between Penta Ocean and OAKTRSPECLENDNEW

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Can any of the company-specific risk be diversified away by investing in both Penta Ocean and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW, you can compare the effects of market volatilities on Penta Ocean and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Ocean and OAKTRSPECLENDNEW.

Diversification Opportunities for Penta Ocean and OAKTRSPECLENDNEW

0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between Penta and OAKTRSPECLENDNEW is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of Penta Ocean i.e., Penta Ocean and OAKTRSPECLENDNEW go up and down completely randomly.

Pair Corralation between Penta Ocean and OAKTRSPECLENDNEW

Assuming the 90 days horizon Penta Ocean Construction Co is expected to generate 1.18 times more return on investment than OAKTRSPECLENDNEW. However, Penta Ocean is 1.18 times more volatile than OAKTRSPECLENDNEW. It trades about 0.15 of its potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about 0.14 per unit of risk. If you would invest  370.00  in Penta Ocean Construction Co on September 13, 2024 and sell it today you would earn a total of  18.00  from holding Penta Ocean Construction Co or generate 4.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Penta Ocean Construction Co  vs.  OAKTRSPECLENDNEW

 Performance 
       Timeline  
Penta Ocean Construc 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Penta Ocean Construction Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Penta Ocean is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
OAKTRSPECLENDNEW 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in OAKTRSPECLENDNEW are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, OAKTRSPECLENDNEW may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Penta Ocean and OAKTRSPECLENDNEW Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Penta Ocean and OAKTRSPECLENDNEW

The main advantage of trading using opposite Penta Ocean and OAKTRSPECLENDNEW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta Ocean position performs unexpectedly, OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW will offset losses from the drop in OAKTRSPECLENDNEW's long position.
The idea behind Penta Ocean Construction Co and OAKTRSPECLENDNEW pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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