Correlation Between Penta Ocean and AOI Electronics
Can any of the company-specific risk be diversified away by investing in both Penta Ocean 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 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 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 with a short position of AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Ocean and AOI Electronics.
Diversification Opportunities for Penta Ocean and AOI Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Penta 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 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 i.e., Penta Ocean and AOI Electronics go up and down completely randomly.
Pair Corralation between Penta Ocean and AOI Electronics
If you would invest 1,868 in AOI Electronics Co on September 26, 2024 and sell it today you would earn a total of 0.00 from holding AOI Electronics Co or generate 0.0% 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 Construc |
| AOI Electronics |
Penta Ocean and AOI Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta Ocean and AOI Electronics
The main advantage of trading using opposite Penta Ocean and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta Ocean 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.| Penta Ocean vs. Transurban Group | Penta Ocean vs. Jiangsu Expressway | Penta Ocean vs. Zhejiang Expressway Co | Penta Ocean vs. Arcosa Inc |
| AOI Electronics vs. Hanison Construction Holdings | AOI Electronics vs. Penta Ocean Construction Co | AOI Electronics vs. Astral Foods Limited | AOI Electronics vs. Nufarm Limited |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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