Correlation Between PennantPark Investment and Berkshire Hills
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Berkshire Hills 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 Berkshire Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Berkshire Hills Bancorp, you can compare the effects of market volatilities on PennantPark Investment and Berkshire Hills 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 Berkshire Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Berkshire Hills.
Diversification Opportunities for PennantPark Investment and Berkshire Hills
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PennantPark and Berkshire is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Berkshire Hills Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hills Bancorp 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 Berkshire Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hills Bancorp has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Berkshire Hills go up and down completely randomly.
Pair Corralation between PennantPark Investment and Berkshire Hills
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.77 times more return on investment than Berkshire Hills. However, PennantPark Investment is 1.29 times less risky than Berkshire Hills. It trades about 0.06 of its potential returns per unit of risk. Berkshire Hills Bancorp is currently generating about 0.02 per unit of risk. If you would invest 409.00 in PennantPark Investment on September 14, 2024 and sell it today you would earn a total of 243.00 from holding PennantPark Investment or generate 59.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Berkshire Hills Bancorp
Performance |
| Timeline |
| PennantPark Investment |
| Berkshire Hills Bancorp |
PennantPark Investment and Berkshire Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Berkshire Hills
The main advantage of trading using opposite PennantPark Investment and Berkshire Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Berkshire Hills 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 Berkshire Hills will offset losses from the drop in Berkshire Hills' long position.| PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. SIVERS SEMICONDUCTORS AB |
| Berkshire Hills vs. PennantPark Investment | Berkshire Hills vs. NXP Semiconductors NV | Berkshire Hills vs. Apollo Investment Corp | Berkshire Hills vs. VIRGIN WINES UK |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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