Correlation Between Penta Ocean and PENN NATL
Can any of the company-specific risk be diversified away by investing in both Penta Ocean and PENN NATL 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 PENN NATL 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 PENN NATL GAMING, you can compare the effects of market volatilities on Penta Ocean and PENN NATL 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 PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Ocean and PENN NATL.
Diversification Opportunities for Penta Ocean and PENN NATL
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Penta and PENN is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING 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 PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of Penta Ocean i.e., Penta Ocean and PENN NATL go up and down completely randomly.
Pair Corralation between Penta Ocean and PENN NATL
Assuming the 90 days horizon Penta Ocean Construction Co is expected to generate 0.5 times more return on investment than PENN NATL. However, Penta Ocean Construction Co is 2.0 times less risky than PENN NATL. It trades about 0.0 of its potential returns per unit of risk. PENN NATL GAMING is currently generating about -0.01 per unit of risk. If you would invest 440.00 in Penta Ocean Construction Co on November 8, 2024 and sell it today you would lose (40.00) from holding Penta Ocean Construction Co or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penta Ocean Construction Co vs. PENN NATL GAMING
Performance |
| Timeline |
| Penta Ocean Construc |
| PENN NATL GAMING |
Penta Ocean and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta Ocean and PENN NATL
The main advantage of trading using opposite Penta Ocean and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta Ocean position performs unexpectedly, PENN NATL 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 PENN NATL will offset losses from the drop in PENN NATL's long position.| Penta Ocean vs. GAMING FAC SA | Penta Ocean vs. Media and Games | Penta Ocean vs. KINGBOARD CHEMICAL | Penta Ocean vs. China BlueChemical |
| PENN NATL vs. Genscript Biotech | PENN NATL vs. Sunny Optical Technology | PENN NATL vs. Kingdee International Software | PENN NATL vs. Yuexiu Transport Infrastructure |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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