Correlation Between Getlink SE and Penta Ocean

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

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

Diversification Opportunities for Getlink SE and Penta Ocean

0.49

Correlation Coefficient

Getlink SE  Penta Ocean

Very weak diversification

The 3 months correlation between Getlink and Penta is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Getlink SE 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 Getlink SE 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 Getlink SE 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 Getlink SE i.e., Getlink SE and Penta Ocean go up and down completely randomly.

Pair Corralation between Getlink SE and Penta Ocean

Assuming the 90 days trading horizon Getlink SE is expected to generate 4.05 times less return on investment than Penta Ocean. But when comparing it to its historical volatility, Getlink SE is 1.04 times less risky than Penta Ocean. It trades about 0.03 of its potential returns per unit of risk. Penta Ocean Construction Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  376.00  in Penta Ocean Construction Co on October 7, 2024 and sell it today you would earn a total of  24.00  from holding Penta Ocean Construction Co or generate 6.38% return on investment over 90 days.

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

Getlink SE  vs.  Penta Ocean Construction Co

Getlink SE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Penta Ocean Construc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Penta Ocean Construction Co are ranked lower than 1 (%) 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.

Pair Trading with Getlink SE and Penta Ocean

The main advantage of trading using opposite Getlink SE and Penta Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getlink SE 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 Getlink SE 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.