Correlation Between PennantPark Investment and ELEMENT FLEET
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and ELEMENT FLEET 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 ELEMENT FLEET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and ELEMENT FLEET MGMT, you can compare the effects of market volatilities on PennantPark Investment and ELEMENT FLEET 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 ELEMENT FLEET. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and ELEMENT FLEET.
Diversification Opportunities for PennantPark Investment and ELEMENT FLEET
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PennantPark and ELEMENT is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and ELEMENT FLEET MGMT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELEMENT FLEET MGMT 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 ELEMENT FLEET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELEMENT FLEET MGMT has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and ELEMENT FLEET go up and down completely randomly.
Pair Corralation between PennantPark Investment and ELEMENT FLEET
Assuming the 90 days horizon PennantPark Investment is expected to generate 1.95 times less return on investment than ELEMENT FLEET. But when comparing it to its historical volatility, PennantPark Investment is 1.09 times less risky than ELEMENT FLEET. It trades about 0.07 of its potential returns per unit of risk. ELEMENT FLEET MGMT is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,830 in ELEMENT FLEET MGMT on September 5, 2024 and sell it today you would earn a total of 120.00 from holding ELEMENT FLEET MGMT or generate 6.56% 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. ELEMENT FLEET MGMT
Performance |
| Timeline |
| PennantPark Investment |
| ELEMENT FLEET MGMT |
PennantPark Investment and ELEMENT FLEET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and ELEMENT FLEET
The main advantage of trading using opposite PennantPark Investment and ELEMENT FLEET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, ELEMENT FLEET 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 ELEMENT FLEET will offset losses from the drop in ELEMENT FLEET's long position.| PennantPark Investment vs. Blackstone Group | PennantPark Investment vs. BlackRock | PennantPark Investment vs. The Bank of | PennantPark Investment vs. Ameriprise Financial |
| ELEMENT FLEET vs. JD SPORTS FASH | ELEMENT FLEET vs. Live Nation Entertainment | ELEMENT FLEET vs. FUTURE GAMING GRP | ELEMENT FLEET vs. Tencent Music Entertainment |
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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