Correlation Between PennantPark Investment and MPH Health
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and MPH Health 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 MPH Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and MPH Health Care, you can compare the effects of market volatilities on PennantPark Investment and MPH Health 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 MPH Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and MPH Health.
Diversification Opportunities for PennantPark Investment and MPH Health
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and MPH is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and MPH Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPH Health Care 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 MPH Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPH Health Care has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and MPH Health go up and down completely randomly.
Pair Corralation between PennantPark Investment and MPH Health
Assuming the 90 days horizon PennantPark Investment is expected to under-perform the MPH Health. In addition to that, PennantPark Investment is 2.98 times more volatile than MPH Health Care. It trades about -0.12 of its total potential returns per unit of risk. MPH Health Care is currently generating about -0.3 per unit of volatility. If you would invest 2,420 in MPH Health Care on November 4, 2024 and sell it today you would lose (100.00) from holding MPH Health Care or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PennantPark Investment vs. MPH Health Care
Performance |
| Timeline |
| PennantPark Investment |
| MPH Health Care |
PennantPark Investment and MPH Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and MPH Health
The main advantage of trading using opposite PennantPark Investment and MPH Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, MPH Health 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 MPH Health will offset losses from the drop in MPH Health's long position.| PennantPark Investment vs. Axfood AB | PennantPark Investment vs. COREBRIDGE FINANCIAL INC | PennantPark Investment vs. CN MODERN DAIRY | PennantPark Investment vs. Cal Maine Foods |
| MPH Health vs. Zijin Mining Group | MPH Health vs. GRIFFIN MINING LTD | MPH Health vs. Endeavour Mining PLC | MPH Health vs. UNIVERSAL DISPLAY |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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