Correlation Between PennantPark Investment and Chalice Mining
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Chalice Mining 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 Chalice Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Chalice Mining Limited, you can compare the effects of market volatilities on PennantPark Investment and Chalice Mining 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 Chalice Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Chalice Mining.
Diversification Opportunities for PennantPark Investment and Chalice Mining
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PennantPark and Chalice is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining 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 Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Chalice Mining go up and down completely randomly.
Pair Corralation between PennantPark Investment and Chalice Mining
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.42 times more return on investment than Chalice Mining. However, PennantPark Investment is 2.37 times less risky than Chalice Mining. It trades about 0.1 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about -0.05 per unit of risk. If you would invest 593.00 in PennantPark Investment on October 18, 2024 and sell it today you would earn a total of 88.00 from holding PennantPark Investment or generate 14.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Chalice Mining Limited
Performance |
| Timeline |
| PennantPark Investment |
| Chalice Mining |
PennantPark Investment and Chalice Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Chalice Mining
The main advantage of trading using opposite PennantPark Investment and Chalice Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Chalice Mining 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 Chalice Mining will offset losses from the drop in Chalice Mining's long position.| PennantPark Investment vs. Columbia Sportswear | PennantPark Investment vs. SCIENCE IN SPORT | PennantPark Investment vs. NTG Nordic Transport | PennantPark Investment vs. Gaztransport Technigaz SA |
| Chalice Mining vs. Chuangs China Investments | Chalice Mining vs. Virtus Investment Partners | Chalice Mining vs. PennantPark Investment | Chalice Mining vs. DIVERSIFIED ROYALTY |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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