Correlation Between PennantPark Investment and Global Ship
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Global Ship 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 Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Global Ship Lease, you can compare the effects of market volatilities on PennantPark Investment and Global Ship 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 Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Global Ship.
Diversification Opportunities for PennantPark Investment and Global Ship
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and Global is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease 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 Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Global Ship go up and down completely randomly.
Pair Corralation between PennantPark Investment and Global Ship
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.84 times more return on investment than Global Ship. However, PennantPark Investment is 1.19 times less risky than Global Ship. It trades about 0.06 of its potential returns per unit of risk. Global Ship Lease is currently generating about 0.04 per unit of risk. If you would invest 546.00 in PennantPark Investment on November 4, 2024 and sell it today you would earn a total of 112.00 from holding PennantPark Investment or generate 20.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Global Ship Lease
Performance |
| Timeline |
| PennantPark Investment |
| Global Ship Lease |
PennantPark Investment and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Global Ship
The main advantage of trading using opposite PennantPark Investment and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| PennantPark Investment vs. Blackstone Group | PennantPark Investment vs. The Bank of | PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. State Street |
| Global Ship vs. Singapore Telecommunications Limited | Global Ship vs. CRISPR Therapeutics AG | Global Ship vs. Cogent Communications Holdings | Global Ship vs. HEMISPHERE EGY |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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