Correlation Between PennantPark Investment and Brockhaus Capital
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Brockhaus Capital 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 Brockhaus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Brockhaus Capital Management, you can compare the effects of market volatilities on PennantPark Investment and Brockhaus Capital 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 Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Brockhaus Capital.
Diversification Opportunities for PennantPark Investment and Brockhaus Capital
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and Brockhaus is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital 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 Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Brockhaus Capital go up and down completely randomly.
Pair Corralation between PennantPark Investment and Brockhaus Capital
Assuming the 90 days horizon PennantPark Investment is expected to under-perform the Brockhaus Capital. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Investment is 1.23 times less risky than Brockhaus Capital. The stock trades about -0.01 of its potential returns per unit of risk. The Brockhaus Capital Management is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,270 in Brockhaus Capital Management on November 3, 2024 and sell it today you would earn a total of 230.00 from holding Brockhaus Capital Management or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Brockhaus Capital Management
Performance |
| Timeline |
| PennantPark Investment |
| Brockhaus Capital |
PennantPark Investment and Brockhaus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Brockhaus Capital
The main advantage of trading using opposite PennantPark Investment and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital's long position.| PennantPark Investment vs. Blackstone Group | PennantPark Investment vs. The Bank of | PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. State Street |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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