Correlation Between PennantPark Investment and ABERFORTH SMCOS
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and ABERFORTH SMCOS 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 PennantPark Investment and ABERFORTH SMCOS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and ABERFORTH SMCOS TRLS 01, you can compare the effects of market volatilities on PennantPark Investment and ABERFORTH SMCOS 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 PennantPark Investment with a short position of ABERFORTH SMCOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and ABERFORTH SMCOS.
Diversification Opportunities for PennantPark Investment and ABERFORTH SMCOS
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PennantPark and ABERFORTH is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and ABERFORTH SMCOS TRLS 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABERFORTH SMCOS TRLS and PennantPark Investment 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 PennantPark Investment are associated (or correlated) with ABERFORTH SMCOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABERFORTH SMCOS TRLS has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and ABERFORTH SMCOS go up and down completely randomly.
Pair Corralation between PennantPark Investment and ABERFORTH SMCOS
Assuming the 90 days horizon PennantPark Investment is expected to generate 1.44 times more return on investment than ABERFORTH SMCOS. However, PennantPark Investment is 1.44 times more volatile than ABERFORTH SMCOS TRLS 01. It trades about 0.06 of its potential returns per unit of risk. ABERFORTH SMCOS TRLS 01 is currently generating about -0.13 per unit of risk. If you would invest 610.00 in PennantPark Investment on August 31, 2024 and sell it today you would earn a total of 33.00 from holding PennantPark Investment or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. ABERFORTH SMCOS TRLS 01
Performance |
| Timeline |
| PennantPark Investment |
| ABERFORTH SMCOS TRLS |
PennantPark Investment and ABERFORTH SMCOS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and ABERFORTH SMCOS
The main advantage of trading using opposite PennantPark Investment and ABERFORTH SMCOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, ABERFORTH SMCOS 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 ABERFORTH SMCOS will offset losses from the drop in ABERFORTH SMCOS's long position.| PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. NMI Holdings |
| ABERFORTH SMCOS vs. PennyMac Mortgage Investment | ABERFORTH SMCOS vs. POWER METALS | ABERFORTH SMCOS vs. Gladstone Investment | ABERFORTH SMCOS vs. PennantPark Investment |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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