Correlation Between Penta Ocean and QUEEN S

Can any of the company-specific risk be diversified away by investing in both Penta Ocean and QUEEN S 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 QUEEN S 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 QUEEN S ROAD, you can compare the effects of market volatilities on Penta Ocean and QUEEN S 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 QUEEN S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta Ocean and QUEEN S.

Diversification Opportunities for Penta Ocean and QUEEN S

-0.17

Correlation Coefficient

Penta Ocean  QUEEN S

Good diversification

The 3 months correlation between Penta and QUEEN is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD 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 QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of Penta Ocean i.e., Penta Ocean and QUEEN S go up and down completely randomly.

Pair Corralation between Penta Ocean and QUEEN S

Assuming the 90 days horizon Penta Ocean Construction Co is expected to generate 0.63 times more return on investment than QUEEN S. However, Penta Ocean Construction Co is 1.58 times less risky than QUEEN S. It trades about 0.19 of its potential returns per unit of risk. QUEEN S ROAD is currently generating about -0.02 per unit of risk. If you would invest  380.00  in Penta Ocean Construction Co on October 22, 2024 and sell it today you would earn a total of  14.00  from holding Penta Ocean Construction Co or generate 3.68% return on investment over 90 days.

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

Penta Ocean Construction Co  vs.  QUEEN S ROAD

Penta Ocean Construc

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Penta Ocean Construction Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Penta Ocean is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

QUEEN S ROAD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QUEEN S ROAD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, QUEEN S is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Penta Ocean and QUEEN S

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

The idea behind Penta Ocean Construction Co and QUEEN S ROAD 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..