Correlation Between Penta Ocean and Onxeo SA

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

Diversification Opportunities for Penta Ocean and Onxeo SA

-0.49

Correlation Coefficient

Penta Ocean  Onxeo SA

Very good diversification

The 3 months correlation between Penta and Onxeo is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and Onxeo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onxeo SA 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 Onxeo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onxeo SA has no effect on the direction of Penta Ocean i.e., Penta Ocean and Onxeo SA go up and down completely randomly.

Pair Corralation between Penta Ocean and Onxeo SA

Assuming the 90 days horizon Penta Ocean is expected to generate 18.16 times less return on investment than Onxeo SA. But when comparing it to its historical volatility, Penta Ocean Construction Co is 15.34 times less risky than Onxeo SA. It trades about 0.11 of its potential returns per unit of risk. Onxeo SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  6.30  in Onxeo SA on December 21, 2024 and sell it today you would lose (1.00) from holding Onxeo SA or give up 15.87% of portfolio value over 90 days.

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

Penta Ocean Construction Co  vs.  Onxeo SA

Penta Ocean Construc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Penta Ocean Construction Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Penta Ocean reported solid returns over the last few months and may actually be approaching a breakup point.

Onxeo SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Onxeo SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Onxeo SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Penta Ocean and Onxeo SA

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

The idea behind Penta Ocean Construction Co and Onxeo SA 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..