Correlation Between PennantPark Investment and Postal Savings
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Postal Savings 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 Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Postal Savings Bank, you can compare the effects of market volatilities on PennantPark Investment and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Postal Savings.
Diversification Opportunities for PennantPark Investment and Postal Savings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and Postal is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Postal Savings go up and down completely randomly.
Pair Corralation between PennantPark Investment and Postal Savings
Assuming the 90 days horizon PennantPark Investment is expected to generate 1.33 times more return on investment than Postal Savings. However, PennantPark Investment is 1.33 times more volatile than Postal Savings Bank. It trades about 0.04 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.01 per unit of risk. If you would invest 632.00 in PennantPark Investment on August 31, 2024 and sell it today you would earn a total of 11.00 from holding PennantPark Investment or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
PennantPark Investment vs. Postal Savings Bank
Performance |
| Timeline |
| PennantPark Investment |
| Postal Savings Bank |
PennantPark Investment and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Postal Savings
The main advantage of trading using opposite PennantPark Investment and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. NMI Holdings |
| Postal Savings vs. ANTA SPORTS PRODUCT | Postal Savings vs. USWE SPORTS AB | Postal Savings vs. PARKEN Sport Entertainment | Postal Savings vs. ADRIATIC METALS LS 013355 |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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