Correlation Between PennantPark Investment and ECHO INVESTMENT
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and ECHO INVESTMENT 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 ECHO INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and ECHO INVESTMENT ZY, you can compare the effects of market volatilities on PennantPark Investment and ECHO INVESTMENT 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 ECHO INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and ECHO INVESTMENT.
Diversification Opportunities for PennantPark Investment and ECHO INVESTMENT
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and ECHO is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and ECHO INVESTMENT ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECHO INVESTMENT ZY 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 ECHO INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECHO INVESTMENT ZY has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and ECHO INVESTMENT go up and down completely randomly.
Pair Corralation between PennantPark Investment and ECHO INVESTMENT
Assuming the 90 days horizon PennantPark Investment is expected to generate 1.28 times more return on investment than ECHO INVESTMENT. However, PennantPark Investment is 1.28 times more volatile than ECHO INVESTMENT ZY. It trades about 0.22 of its potential returns per unit of risk. ECHO INVESTMENT ZY is currently generating about -0.02 per unit of risk. If you would invest 635.00 in PennantPark Investment on October 20, 2024 and sell it today you would earn a total of 53.00 from holding PennantPark Investment or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. ECHO INVESTMENT ZY
Performance |
| Timeline |
| PennantPark Investment |
| ECHO INVESTMENT ZY |
PennantPark Investment and ECHO INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and ECHO INVESTMENT
The main advantage of trading using opposite PennantPark Investment and ECHO INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, ECHO INVESTMENT 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 ECHO INVESTMENT will offset losses from the drop in ECHO INVESTMENT's long position.| PennantPark Investment vs. DATATEC LTD 2 | PennantPark Investment vs. MICRONIC MYDATA | PennantPark Investment vs. HEMISPHERE EGY | PennantPark Investment vs. COMPUTERSHARE |
| ECHO INVESTMENT vs. MAG SILVER | ECHO INVESTMENT vs. Yanzhou Coal Mining | ECHO INVESTMENT vs. BROADWIND ENRGY | ECHO INVESTMENT vs. Gaztransport Technigaz SA |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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