Correlation Between Penta-Ocean Construction and AOI Electronics
Can any of the company-specific risk be diversified away by investing in both Penta-Ocean Construction and AOI Electronics 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 Construction and AOI Electronics 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 AOI Electronics Co, you can compare the effects of market volatilities on Penta-Ocean Construction and AOI Electronics 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 Construction with a short position of AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta-Ocean Construction and AOI Electronics.
Diversification Opportunities for Penta-Ocean Construction and AOI Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Penta-Ocean and AOI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and AOI Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOI Electronics and Penta-Ocean Construction 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 AOI Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOI Electronics has no effect on the direction of Penta-Ocean Construction i.e., Penta-Ocean Construction and AOI Electronics go up and down completely randomly.
Pair Corralation between Penta-Ocean Construction and AOI Electronics
If you would invest 376.00 in Penta Ocean Construction Co on October 16, 2024 and sell it today you would earn a total of 24.00 from holding Penta Ocean Construction Co or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penta Ocean Construction Co vs. AOI Electronics Co
Performance |
| Timeline |
| Penta-Ocean Construction |
| AOI Electronics |
Penta-Ocean Construction and AOI Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta-Ocean Construction and AOI Electronics
The main advantage of trading using opposite Penta-Ocean Construction and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta-Ocean Construction position performs unexpectedly, AOI Electronics 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 AOI Electronics will offset losses from the drop in AOI Electronics' long position.The idea behind Penta Ocean Construction Co and AOI Electronics Co 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.
| AOI Electronics vs. ADRIATIC METALS LS 013355 | AOI Electronics vs. VULCAN MATERIALS | AOI Electronics vs. The Yokohama Rubber | AOI Electronics vs. Compagnie Plastic Omnium |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |