Correlation Between PennantPark Investment and Deutsche Pfandbriefbank
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Deutsche Pfandbriefbank 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 Pfandbriefbank 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 Pfandbriefbank AG, you can compare the effects of market volatilities on PennantPark Investment and Deutsche Pfandbriefbank 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 Pfandbriefbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Deutsche Pfandbriefbank.
Diversification Opportunities for PennantPark Investment and Deutsche Pfandbriefbank
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PennantPark and Deutsche is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Deutsche Pfandbriefbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Pfandbriefbank 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 Pfandbriefbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Pfandbriefbank has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Deutsche Pfandbriefbank go up and down completely randomly.
Pair Corralation between PennantPark Investment and Deutsche Pfandbriefbank
Assuming the 90 days horizon PennantPark Investment is expected to generate 1.25 times more return on investment than Deutsche Pfandbriefbank. However, PennantPark Investment is 1.25 times more volatile than Deutsche Pfandbriefbank AG. It trades about -0.06 of its potential returns per unit of risk. Deutsche Pfandbriefbank AG is currently generating about -0.18 per unit of risk. If you would invest 663.00 in PennantPark Investment on September 15, 2024 and sell it today you would lose (13.00) from holding PennantPark Investment or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
PennantPark Investment vs. Deutsche Pfandbriefbank AG
Performance |
| Timeline |
| PennantPark Investment |
| Deutsche Pfandbriefbank |
PennantPark Investment and Deutsche Pfandbriefbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Deutsche Pfandbriefbank
The main advantage of trading using opposite PennantPark Investment and Deutsche Pfandbriefbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Deutsche Pfandbriefbank 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 Pfandbriefbank will offset losses from the drop in Deutsche Pfandbriefbank's long position.| PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. SIVERS SEMICONDUCTORS AB |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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