Correlation Between PennantPark Investment and GBS Software
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and GBS Software 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 GBS Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and GBS Software AG, you can compare the effects of market volatilities on PennantPark Investment and GBS Software 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 GBS Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and GBS Software.
Diversification Opportunities for PennantPark Investment and GBS Software
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between PennantPark and GBS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and GBS Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBS Software AG 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 GBS Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBS Software AG has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and GBS Software go up and down completely randomly.
Pair Corralation between PennantPark Investment and GBS Software
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.85 times more return on investment than GBS Software. However, PennantPark Investment is 1.18 times less risky than GBS Software. It trades about 0.06 of its potential returns per unit of risk. GBS Software AG is currently generating about 0.04 per unit of risk. If you would invest 411.00 in PennantPark Investment on October 12, 2024 and sell it today you would earn a total of 279.00 from holding PennantPark Investment or generate 67.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
PennantPark Investment vs. GBS Software AG
Performance |
| Timeline |
| PennantPark Investment |
| GBS Software AG |
PennantPark Investment and GBS Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and GBS Software
The main advantage of trading using opposite PennantPark Investment and GBS Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, GBS Software 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 GBS Software will offset losses from the drop in GBS Software's long position.| PennantPark Investment vs. Nomad Foods | PennantPark Investment vs. GEELY AUTOMOBILE | PennantPark Investment vs. MTY Food Group | PennantPark Investment vs. Spirent Communications plc |
| GBS Software vs. Taiwan Semiconductor Manufacturing | GBS Software vs. MAGNUM MINING EXP | GBS Software vs. MCEWEN MINING INC | GBS Software vs. GREENX METALS LTD |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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