Correlation Between PennantPark Investment and PLAYWAY SA
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and PLAYWAY SA 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 PLAYWAY SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and PLAYWAY SA ZY 10, you can compare the effects of market volatilities on PennantPark Investment and PLAYWAY SA 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 PLAYWAY SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and PLAYWAY SA.
Diversification Opportunities for PennantPark Investment and PLAYWAY SA
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PennantPark and PLAYWAY is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and PLAYWAY SA ZY 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWAY SA 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 PLAYWAY SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWAY SA ZY has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and PLAYWAY SA go up and down completely randomly.
Pair Corralation between PennantPark Investment and PLAYWAY SA
Assuming the 90 days horizon PennantPark Investment is expected to generate 4.28 times less return on investment than PLAYWAY SA. But when comparing it to its historical volatility, PennantPark Investment is 2.36 times less risky than PLAYWAY SA. It trades about 0.03 of its potential returns per unit of risk. PLAYWAY SA ZY 10 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,796 in PLAYWAY SA ZY 10 on September 3, 2024 and sell it today you would earn a total of 1,404 from holding PLAYWAY SA ZY 10 or generate 29.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. PLAYWAY SA ZY 10
Performance |
| Timeline |
| PennantPark Investment |
| PLAYWAY SA ZY |
PennantPark Investment and PLAYWAY SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and PLAYWAY SA
The main advantage of trading using opposite PennantPark Investment and PLAYWAY SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, PLAYWAY SA 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 PLAYWAY SA will offset losses from the drop in PLAYWAY SA's long position.| PennantPark Investment vs. Blackstone Group | PennantPark Investment vs. BlackRock | PennantPark Investment vs. The Bank of | PennantPark Investment vs. Ameriprise Financial |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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