Correlation Between PennantPark Investment and Deutsche Telekom
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Deutsche Telekom 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 Deutsche Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Deutsche Telekom AG, you can compare the effects of market volatilities on PennantPark Investment and Deutsche Telekom 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 Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Deutsche Telekom.
Diversification Opportunities for PennantPark Investment and Deutsche Telekom
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PennantPark and Deutsche is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom 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 Deutsche Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Telekom has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Deutsche Telekom go up and down completely randomly.
Pair Corralation between PennantPark Investment and Deutsche Telekom
Assuming the 90 days horizon PennantPark Investment is expected to generate 1.01 times less return on investment than Deutsche Telekom. In addition to that, PennantPark Investment is 2.1 times more volatile than Deutsche Telekom AG. It trades about 0.06 of its total potential returns per unit of risk. Deutsche Telekom AG is currently generating about 0.12 per unit of volatility. If you would invest 1,794 in Deutsche Telekom AG on September 4, 2024 and sell it today you would earn a total of 1,244 from holding Deutsche Telekom AG or generate 69.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Deutsche Telekom AG
Performance |
| Timeline |
| PennantPark Investment |
| Deutsche Telekom |
PennantPark Investment and Deutsche Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Deutsche Telekom
The main advantage of trading using opposite PennantPark Investment and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Deutsche Telekom 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 Deutsche Telekom will offset losses from the drop in Deutsche Telekom's long position.| PennantPark Investment vs. Blackstone Group | PennantPark Investment vs. BlackRock | PennantPark Investment vs. The Bank of | PennantPark Investment vs. Ameriprise Financial |
| Deutsche Telekom vs. Diamyd Medical AB | Deutsche Telekom vs. Apollo Medical Holdings | Deutsche Telekom vs. SCANDMEDICAL SOLDK 040 | Deutsche Telekom vs. Beijing Media |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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