Correlation Between Penta Ocean and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both Penta Ocean and FAST RETAIL 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 FAST RETAIL 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 FAST RETAIL ADR, you can compare the effects of market volatilities on Penta Ocean and FAST RETAIL 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 FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Ocean and FAST RETAIL.
Diversification Opportunities for Penta Ocean and FAST RETAIL
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Penta and FAST is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR 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 FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of Penta Ocean i.e., Penta Ocean and FAST RETAIL go up and down completely randomly.
Pair Corralation between Penta Ocean and FAST RETAIL
Assuming the 90 days horizon Penta Ocean is expected to generate 8.1 times less return on investment than FAST RETAIL. But when comparing it to its historical volatility, Penta Ocean Construction Co is 1.25 times less risky than FAST RETAIL. It trades about 0.02 of its potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,980 in FAST RETAIL ADR on September 1, 2024 and sell it today you would earn a total of 180.00 from holding FAST RETAIL ADR or generate 6.04% 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. FAST RETAIL ADR
Performance |
| Timeline |
| Penta Ocean Construc |
| FAST RETAIL ADR |
Penta Ocean and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta Ocean and FAST RETAIL
The main advantage of trading using opposite Penta Ocean and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta Ocean position performs unexpectedly, FAST RETAIL 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 FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.| Penta Ocean vs. Transurban Group | Penta Ocean vs. Jiangsu Expressway | Penta Ocean vs. Zhejiang Expressway Co | Penta Ocean vs. Arcosa Inc |
| FAST RETAIL vs. AOYAMA TRADING | FAST RETAIL vs. Global Fashion Group | FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. NMI Holdings |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |