Correlation Between Penta Ocean and IMAGIN MEDICAL

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

Diversification Opportunities for Penta Ocean and IMAGIN MEDICAL

0.0

Correlation Coefficient

Penta Ocean  IMAGIN MEDICAL

Pay attention - limited upside

The 3 months correlation between Penta and IMAGIN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and IMAGIN MEDICAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMAGIN MEDICAL INC 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 IMAGIN MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMAGIN MEDICAL INC has no effect on the direction of Penta Ocean i.e., Penta Ocean and IMAGIN MEDICAL go up and down completely randomly.

Pair Corralation between Penta Ocean and IMAGIN MEDICAL

Assuming the 90 days horizon Penta Ocean Construction Co is expected to under-perform the IMAGIN MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, Penta Ocean Construction Co is 75.86 times less risky than IMAGIN MEDICAL. The stock trades about -0.01 of its potential returns per unit of risk. The IMAGIN MEDICAL INC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  11.00  in IMAGIN MEDICAL INC on October 5, 2024 and sell it today you would lose (10.95) from holding IMAGIN MEDICAL INC or give up 99.55% of portfolio value over 90 days.

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

Penta Ocean Construction Co  vs.  IMAGIN MEDICAL INC

Penta Ocean Construc

Risk-Adjusted Performance

0 of 100

Very Weak

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

IMAGIN MEDICAL INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IMAGIN MEDICAL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, IMAGIN MEDICAL 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 IMAGIN MEDICAL

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

The idea behind Penta Ocean Construction Co and IMAGIN MEDICAL INC 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.