Correlation Between Grand Ocean and Sentronic International

Can any of the company-specific risk be diversified away by investing in both Grand Ocean and Sentronic International 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 Grand Ocean and Sentronic International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grand Ocean Retail and Sentronic International, you can compare the effects of market volatilities on Grand Ocean and Sentronic International 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 Grand Ocean with a short position of Sentronic International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Ocean and Sentronic International.

Diversification Opportunities for Grand Ocean and Sentronic International

0.34

Correlation Coefficient

Grand Ocean  Sentronic International

Weak diversification

The 3 months correlation between Grand and Sentronic is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and Sentronic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentronic International and Grand 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 Grand Ocean Retail are associated (or correlated) with Sentronic International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentronic International has no effect on the direction of Grand Ocean i.e., Grand Ocean and Sentronic International go up and down completely randomly.

Pair Corralation between Grand Ocean and Sentronic International

Assuming the 90 days trading horizon Grand Ocean Retail is expected to under-perform the Sentronic International. In addition to that, Grand Ocean is 2.62 times more volatile than Sentronic International. It trades about -0.37 of its total potential returns per unit of risk. Sentronic International is currently generating about -0.31 per unit of volatility. If you would invest  2,425  in Sentronic International on October 10, 2024 and sell it today you would lose (175.00) from holding Sentronic International or give up 7.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Grand Ocean Retail  vs.  Sentronic International

Grand Ocean Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Ocean Retail has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Sentronic International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sentronic International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Grand Ocean and Sentronic International

The main advantage of trading using opposite Grand Ocean and Sentronic International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Ocean position performs unexpectedly, Sentronic International 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 Sentronic International will offset losses from the drop in Sentronic International's long position.

The idea behind Grand Ocean Retail and Sentronic International 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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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.