Correlation Between PennantPark Investment and NEW MILLENNIUM
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and NEW MILLENNIUM 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 NEW MILLENNIUM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and NEW MILLENNIUM IRON, you can compare the effects of market volatilities on PennantPark Investment and NEW MILLENNIUM 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 NEW MILLENNIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and NEW MILLENNIUM.
Diversification Opportunities for PennantPark Investment and NEW MILLENNIUM
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and NEW is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and NEW MILLENNIUM IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW MILLENNIUM IRON 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 NEW MILLENNIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW MILLENNIUM IRON has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and NEW MILLENNIUM go up and down completely randomly.
Pair Corralation between PennantPark Investment and NEW MILLENNIUM
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.99 times more return on investment than NEW MILLENNIUM. However, PennantPark Investment is 1.01 times less risky than NEW MILLENNIUM. It trades about -0.07 of its potential returns per unit of risk. NEW MILLENNIUM IRON is currently generating about -0.2 per unit of risk. If you would invest 693.00 in PennantPark Investment on November 8, 2024 and sell it today you would lose (24.00) from holding PennantPark Investment or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. NEW MILLENNIUM IRON
Performance |
| Timeline |
| PennantPark Investment |
| NEW MILLENNIUM IRON |
PennantPark Investment and NEW MILLENNIUM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and NEW MILLENNIUM
The main advantage of trading using opposite PennantPark Investment and NEW MILLENNIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, NEW MILLENNIUM 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 NEW MILLENNIUM will offset losses from the drop in NEW MILLENNIUM's long position.| PennantPark Investment vs. BRIT AMER TOBACCO | PennantPark Investment vs. Global Ship Lease | PennantPark Investment vs. GRENKELEASING Dusseldorf | PennantPark Investment vs. RYU Apparel |
| NEW MILLENNIUM vs. DELTA AIR LINES | NEW MILLENNIUM vs. Air New Zealand | NEW MILLENNIUM vs. AIR LIQUIDE ADR | NEW MILLENNIUM vs. ALTAIR RES INC |
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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