Correlation Between PennantPark Investment and Logista
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Logista 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 Logista into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Logista, you can compare the effects of market volatilities on PennantPark Investment and Logista 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 Logista. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Logista.
Diversification Opportunities for PennantPark Investment and Logista
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PennantPark and Logista is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Logista in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logista 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 Logista. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logista has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Logista go up and down completely randomly.
Pair Corralation between PennantPark Investment and Logista
Assuming the 90 days horizon PennantPark Investment is expected to generate 3.82 times less return on investment than Logista. In addition to that, PennantPark Investment is 1.84 times more volatile than Logista. It trades about 0.02 of its total potential returns per unit of risk. Logista is currently generating about 0.12 per unit of volatility. If you would invest 2,625 in Logista on September 1, 2024 and sell it today you would earn a total of 375.00 from holding Logista or generate 14.29% 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. Logista
Performance |
| Timeline |
| PennantPark Investment |
| Logista |
PennantPark Investment and Logista Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Logista
The main advantage of trading using opposite PennantPark Investment and Logista positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Logista 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 Logista will offset losses from the drop in Logista's long position.| PennantPark Investment vs. MeVis Medical Solutions | PennantPark Investment vs. ONWARD MEDICAL BV | PennantPark Investment vs. Compugroup Medical SE | PennantPark Investment vs. Insurance Australia Group |
| Logista vs. Addus HomeCare | Logista vs. HomeToGo SE | Logista vs. PennantPark Investment | Logista vs. Haier Smart Home |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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