Correlation Between PennantPark Investment and EMBARK EDUCATION
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and EMBARK EDUCATION 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 EMBARK EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and EMBARK EDUCATION LTD, you can compare the effects of market volatilities on PennantPark Investment and EMBARK EDUCATION 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 EMBARK EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and EMBARK EDUCATION.
Diversification Opportunities for PennantPark Investment and EMBARK EDUCATION
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and EMBARK is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and EMBARK EDUCATION LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMBARK EDUCATION LTD 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 EMBARK EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMBARK EDUCATION LTD has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and EMBARK EDUCATION go up and down completely randomly.
Pair Corralation between PennantPark Investment and EMBARK EDUCATION
If you would invest 617.00 in PennantPark Investment on October 30, 2024 and sell it today you would earn a total of 41.00 from holding PennantPark Investment or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. EMBARK EDUCATION LTD
Performance |
| Timeline |
| PennantPark Investment |
| EMBARK EDUCATION LTD |
PennantPark Investment and EMBARK EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and EMBARK EDUCATION
The main advantage of trading using opposite PennantPark Investment and EMBARK EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, EMBARK EDUCATION 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 EMBARK EDUCATION will offset losses from the drop in EMBARK EDUCATION's long position.| PennantPark Investment vs. Yuexiu Transport Infrastructure | PennantPark Investment vs. ECHO INVESTMENT ZY | PennantPark Investment vs. SEI INVESTMENTS | PennantPark Investment vs. MGIC INVESTMENT |
| EMBARK EDUCATION vs. IDP EDUCATION LTD | EMBARK EDUCATION vs. TAL Education Group | EMBARK EDUCATION vs. Grand Canyon Education | EMBARK EDUCATION vs. Graham Holdings Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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