Correlation Between REMEDY ENTERTAINMENT and Penta Ocean

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

By analyzing existing cross correlation between REMEDY ENTERTAINMENT OYJ and Penta Ocean Construction Co, you can compare the effects of market volatilities on REMEDY ENTERTAINMENT and Penta Ocean 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 REMEDY ENTERTAINMENT with a short position of Penta Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of REMEDY ENTERTAINMENT and Penta Ocean.

Diversification Opportunities for REMEDY ENTERTAINMENT and Penta Ocean

-0.06

Correlation Coefficient

REMEDY ENTERTAINMENT  Penta Ocean

Good diversification

The 3 months correlation between REMEDY and Penta is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding REMEDY ENTERTAINMENT OYJ and Penta Ocean Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta Ocean Construc and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ are associated (or correlated) with Penta Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta Ocean Construc has no effect on the direction of REMEDY ENTERTAINMENT i.e., REMEDY ENTERTAINMENT and Penta Ocean go up and down completely randomly.

Pair Corralation between REMEDY ENTERTAINMENT and Penta Ocean

Assuming the 90 days horizon REMEDY ENTERTAINMENT OYJ is expected to under-perform the Penta Ocean. In addition to that, REMEDY ENTERTAINMENT is 1.68 times more volatile than Penta Ocean Construction Co. It trades about -0.06 of its total potential returns per unit of risk. Penta Ocean Construction Co is currently generating about 0.08 per unit of volatility. If you would invest  370.00  in Penta Ocean Construction Co on October 25, 2024 and sell it today you would earn a total of  22.00  from holding Penta Ocean Construction Co or generate 5.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

REMEDY ENTERTAINMENT OYJ  vs.  Penta Ocean Construction Co

REMEDY ENTERTAINMENT OYJ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days REMEDY ENTERTAINMENT OYJ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Penta Ocean Construc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Penta Ocean Construction Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Penta Ocean may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with REMEDY ENTERTAINMENT and Penta Ocean

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

The idea behind REMEDY ENTERTAINMENT OYJ and Penta Ocean Construction 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.