Correlation Between PennantPark Investment and Linedata Services
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Linedata Services 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 Linedata Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Linedata Services SA, you can compare the effects of market volatilities on PennantPark Investment and Linedata Services 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 Linedata Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Linedata Services.
Diversification Opportunities for PennantPark Investment and Linedata Services
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PennantPark and Linedata is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Linedata Services SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linedata Services 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 Linedata Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linedata Services has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Linedata Services go up and down completely randomly.
Pair Corralation between PennantPark Investment and Linedata Services
Assuming the 90 days horizon PennantPark Investment is expected to generate 1.03 times less return on investment than Linedata Services. In addition to that, PennantPark Investment is 1.09 times more volatile than Linedata Services SA. It trades about 0.07 of its total potential returns per unit of risk. Linedata Services SA is currently generating about 0.08 per unit of volatility. If you would invest 4,610 in Linedata Services SA on October 16, 2024 and sell it today you would earn a total of 3,710 from holding Linedata Services SA or generate 80.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Linedata Services SA
Performance |
| Timeline |
| PennantPark Investment |
| Linedata Services |
PennantPark Investment and Linedata Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Linedata Services
The main advantage of trading using opposite PennantPark Investment and Linedata Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Linedata Services 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 Linedata Services will offset losses from the drop in Linedata Services' long position.| PennantPark Investment vs. NH HOTEL GROUP | PennantPark Investment vs. PPHE HOTEL GROUP | PennantPark Investment vs. InterContinental Hotels Group | PennantPark Investment vs. Choice Hotels International |
| Linedata Services vs. Sunny Optical Technology | Linedata Services vs. Digilife Technologies Limited | Linedata Services vs. ASPEN TECHINC DL | Linedata Services vs. SILVER BULLET DATA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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