Correlation Between PennantPark Investment and HEMISPHERE EGY
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and HEMISPHERE EGY 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 HEMISPHERE EGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and HEMISPHERE EGY, you can compare the effects of market volatilities on PennantPark Investment and HEMISPHERE EGY 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 HEMISPHERE EGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and HEMISPHERE EGY.
Diversification Opportunities for PennantPark Investment and HEMISPHERE EGY
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PennantPark and HEMISPHERE is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and HEMISPHERE EGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEMISPHERE EGY 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 HEMISPHERE EGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEMISPHERE EGY has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and HEMISPHERE EGY go up and down completely randomly.
Pair Corralation between PennantPark Investment and HEMISPHERE EGY
Assuming the 90 days horizon PennantPark Investment is expected to generate 2.22 times more return on investment than HEMISPHERE EGY. However, PennantPark Investment is 2.22 times more volatile than HEMISPHERE EGY. It trades about 0.19 of its potential returns per unit of risk. HEMISPHERE EGY is currently generating about 0.01 per unit of risk. If you would invest 642.00 in PennantPark Investment on October 13, 2024 and sell it today you would earn a total of 48.00 from holding PennantPark Investment or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. HEMISPHERE EGY
Performance |
| Timeline |
| PennantPark Investment |
| HEMISPHERE EGY |
PennantPark Investment and HEMISPHERE EGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and HEMISPHERE EGY
The main advantage of trading using opposite PennantPark Investment and HEMISPHERE EGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, HEMISPHERE EGY 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 HEMISPHERE EGY will offset losses from the drop in HEMISPHERE EGY'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 |
| HEMISPHERE EGY vs. MidCap Financial Investment | HEMISPHERE EGY vs. Charter Communications | HEMISPHERE EGY vs. SEI INVESTMENTS | HEMISPHERE EGY vs. PennantPark Investment |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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