Correlation Between PennantPark Investment and AGRICULTBK HADR25
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and AGRICULTBK HADR25 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 AGRICULTBK HADR25 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and AGRICULTBK HADR25 YC, you can compare the effects of market volatilities on PennantPark Investment and AGRICULTBK HADR25 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 AGRICULTBK HADR25. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and AGRICULTBK HADR25.
Diversification Opportunities for PennantPark Investment and AGRICULTBK HADR25
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PennantPark and AGRICULTBK is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and AGRICULTBK HADR25 YC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGRICULTBK HADR25 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 AGRICULTBK HADR25. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGRICULTBK HADR25 has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and AGRICULTBK HADR25 go up and down completely randomly.
Pair Corralation between PennantPark Investment and AGRICULTBK HADR25
Assuming the 90 days horizon PennantPark Investment is expected to generate 1.27 times less return on investment than AGRICULTBK HADR25. But when comparing it to its historical volatility, PennantPark Investment is 1.11 times less risky than AGRICULTBK HADR25. It trades about 0.12 of its potential returns per unit of risk. AGRICULTBK HADR25 YC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,020 in AGRICULTBK HADR25 YC on August 30, 2024 and sell it today you would earn a total of 130.00 from holding AGRICULTBK HADR25 YC or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
PennantPark Investment vs. AGRICULTBK HADR25 YC
Performance |
| Timeline |
| PennantPark Investment |
| AGRICULTBK HADR25 |
PennantPark Investment and AGRICULTBK HADR25 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and AGRICULTBK HADR25
The main advantage of trading using opposite PennantPark Investment and AGRICULTBK HADR25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, AGRICULTBK HADR25 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 AGRICULTBK HADR25 will offset losses from the drop in AGRICULTBK HADR25's long position.| PennantPark Investment vs. THAI BEVERAGE | PennantPark Investment vs. LG Display Co | PennantPark Investment vs. USWE SPORTS AB | PennantPark Investment vs. NISSIN FOODS HLDGS |
| AGRICULTBK HADR25 vs. Methode Electronics | AGRICULTBK HADR25 vs. ELECTRONIC ARTS | AGRICULTBK HADR25 vs. METHODE ELECTRONICS | AGRICULTBK HADR25 vs. Verizon Communications |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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