Correlation Between Penta-Ocean Construction and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Penta-Ocean Construction and Strategic Investments 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 Construction and Strategic Investments 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 Strategic Investments AS, you can compare the effects of market volatilities on Penta-Ocean Construction and Strategic Investments 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 Construction with a short position of Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penta-Ocean Construction and Strategic Investments.
Diversification Opportunities for Penta-Ocean Construction and Strategic Investments
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Penta-Ocean and Strategic is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Penta Ocean Construction Co and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments and Penta-Ocean Construction 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Penta-Ocean Construction i.e., Penta-Ocean Construction and Strategic Investments go up and down completely randomly.
Pair Corralation between Penta-Ocean Construction and Strategic Investments
Assuming the 90 days trading horizon Penta Ocean Construction Co is expected to generate 0.54 times more return on investment than Strategic Investments. However, Penta Ocean Construction Co is 1.86 times less risky than Strategic Investments. It trades about 0.27 of its potential returns per unit of risk. Strategic Investments AS is currently generating about 0.05 per unit of risk. If you would invest 606.00 in Penta Ocean Construction Co on September 4, 2025 and sell it today you would earn a total of 304.00 from holding Penta Ocean Construction Co or generate 50.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penta Ocean Construction Co vs. Strategic Investments AS
Performance |
| Timeline |
| Penta-Ocean Construction |
| Strategic Investments |
Penta-Ocean Construction and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penta-Ocean Construction and Strategic Investments
The main advantage of trading using opposite Penta-Ocean Construction and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penta-Ocean Construction position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| Penta-Ocean Construction vs. GMO Internet | Penta-Ocean Construction vs. CRISPR Therapeutics AG | Penta-Ocean Construction vs. Sabra Health Care | Penta-Ocean Construction vs. China Communications Services |
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Check out your portfolio center.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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