Correlation Between Penta Ocean and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Penta Ocean and Geely Automobile 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 Geely Automobile 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 Geely Automobile Holdings, you can compare the effects of market volatilities on Penta Ocean and Geely Automobile 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 Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Ocean and Geely Automobile.
Diversification Opportunities for Penta Ocean and Geely Automobile
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Penta and Geely is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings 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 Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of Penta Ocean i.e., Penta Ocean and Geely Automobile go up and down completely randomly.
Pair Corralation between Penta Ocean and Geely Automobile
Assuming the 90 days horizon Penta Ocean Construction Co is expected to generate 0.5 times more return on investment than Geely Automobile. However, Penta Ocean Construction Co is 1.99 times less risky than Geely Automobile. It trades about 0.06 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.02 per unit of risk. If you would invest 370.00 in Penta Ocean Construction Co on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Penta Ocean Construction Co or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penta Ocean Construction Co vs. Geely Automobile Holdings
Performance |
| Timeline |
| Penta Ocean Construc |
| Geely Automobile Holdings |
Penta Ocean and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta Ocean and Geely Automobile
The main advantage of trading using opposite Penta Ocean and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta Ocean position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile's long position.| Penta Ocean vs. Transurban Group | Penta Ocean vs. Jiangsu Expressway | Penta Ocean vs. Zhejiang Expressway Co | Penta Ocean vs. Arcosa Inc |
| Geely Automobile vs. ADRIATIC METALS LS 013355 | Geely Automobile vs. LION ONE METALS | Geely Automobile vs. GRIFFIN MINING LTD | Geely Automobile vs. Scientific Games |
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 Stocks Directory module to find actively traded stocks across global markets.
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