Correlation Between Penta Ocean and Linde PLC
Can any of the company-specific risk be diversified away by investing in both Penta Ocean and Linde PLC 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 Linde PLC 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 Linde PLC, you can compare the effects of market volatilities on Penta Ocean and Linde PLC 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 Linde PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Ocean and Linde PLC.
Diversification Opportunities for Penta Ocean and Linde PLC
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Penta and Linde is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and Linde PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linde PLC 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 Linde PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linde PLC has no effect on the direction of Penta Ocean i.e., Penta Ocean and Linde PLC go up and down completely randomly.
Pair Corralation between Penta Ocean and Linde PLC
Assuming the 90 days horizon Penta Ocean Construction Co is expected to under-perform the Linde PLC. In addition to that, Penta Ocean is 1.02 times more volatile than Linde PLC. It trades about -0.02 of its total potential returns per unit of risk. Linde PLC is currently generating about 0.18 per unit of volatility. If you would invest 40,720 in Linde PLC on October 29, 2024 and sell it today you would earn a total of 1,320 from holding Linde PLC or generate 3.24% 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. Linde PLC
Performance |
| Timeline |
| Penta Ocean Construc |
| Linde PLC |
Penta Ocean and Linde PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta Ocean and Linde PLC
The main advantage of trading using opposite Penta Ocean and Linde PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta Ocean position performs unexpectedly, Linde PLC 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 Linde PLC will offset losses from the drop in Linde PLC's long position.| Penta Ocean vs. Darden Restaurants | Penta Ocean vs. Chuangs China Investments | Penta Ocean vs. PSI Software AG | Penta Ocean vs. MAGIC SOFTWARE ENTR |
| Linde PLC vs. Synovus Financial Corp | Linde PLC vs. Canadian Utilities Limited | Linde PLC vs. Hemisphere Energy Corp | Linde PLC vs. Vishay Intertechnology |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Transaction History View history of all your transactions and understand their impact on performance |