Correlation Between PennantPark Investment and AGNC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and AGNC 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 AGNC 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 AGNC INVESTMENT, you can compare the effects of market volatilities on PennantPark Investment and AGNC 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 AGNC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and AGNC INVESTMENT.
Diversification Opportunities for PennantPark Investment and AGNC INVESTMENT
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PennantPark and AGNC is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and AGNC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGNC INVESTMENT 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 AGNC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGNC INVESTMENT has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and AGNC INVESTMENT go up and down completely randomly.
Pair Corralation between PennantPark Investment and AGNC INVESTMENT
Assuming the 90 days horizon PennantPark Investment is expected to under-perform the AGNC INVESTMENT. In addition to that, PennantPark Investment is 1.88 times more volatile than AGNC INVESTMENT. It trades about -0.05 of its total potential returns per unit of risk. AGNC INVESTMENT is currently generating about 0.23 per unit of volatility. If you would invest 874.00 in AGNC INVESTMENT on September 13, 2024 and sell it today you would earn a total of 38.00 from holding AGNC INVESTMENT or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. AGNC INVESTMENT
Performance |
| Timeline |
| PennantPark Investment |
| AGNC INVESTMENT |
PennantPark Investment and AGNC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and AGNC INVESTMENT
The main advantage of trading using opposite PennantPark Investment and AGNC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, AGNC 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 AGNC INVESTMENT will offset losses from the drop in AGNC INVESTMENT's 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 |
| AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple Inc | AGNC INVESTMENT vs. Apple 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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