Correlation Between Penta-Ocean Construction and FANDIFI TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Penta-Ocean Construction and FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY P, you can compare the effects of market volatilities on Penta-Ocean Construction and FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta-Ocean Construction and FANDIFI TECHNOLOGY.
Diversification Opportunities for Penta-Ocean Construction and FANDIFI TECHNOLOGY
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Penta-Ocean and FANDIFI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and FANDIFI TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FANDIFI TECHNOLOGY has no effect on the direction of Penta-Ocean Construction i.e., Penta-Ocean Construction and FANDIFI TECHNOLOGY go up and down completely randomly.
Pair Corralation between Penta-Ocean Construction and FANDIFI TECHNOLOGY
Assuming the 90 days horizon Penta Ocean Construction Co is expected to under-perform the FANDIFI TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, Penta Ocean Construction Co is 15.68 times less risky than FANDIFI TECHNOLOGY. The stock trades about -0.01 of its potential returns per unit of risk. The FANDIFI TECHNOLOGY P is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.20 in FANDIFI TECHNOLOGY P on October 12, 2024 and sell it today you would lose (3.15) from holding FANDIFI TECHNOLOGY P or give up 98.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Penta Ocean Construction Co vs. FANDIFI TECHNOLOGY P
Performance |
| Timeline |
| Penta-Ocean Construction |
| FANDIFI TECHNOLOGY |
Penta-Ocean Construction and FANDIFI TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta-Ocean Construction and FANDIFI TECHNOLOGY
The main advantage of trading using opposite Penta-Ocean Construction and FANDIFI TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta-Ocean Construction position performs unexpectedly, FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY will offset losses from the drop in FANDIFI TECHNOLOGY's long position.The idea behind Penta Ocean Construction Co and FANDIFI TECHNOLOGY P 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.
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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