Correlation Between PennantPark Investment and SHIN ETSU
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and SHIN ETSU 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 SHIN ETSU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and SHIN ETSU CHEMICAL, you can compare the effects of market volatilities on PennantPark Investment and SHIN ETSU 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 SHIN ETSU. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and SHIN ETSU.
Diversification Opportunities for PennantPark Investment and SHIN ETSU
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PennantPark and SHIN is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and SHIN ETSU CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIN ETSU CHEMICAL 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 SHIN ETSU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIN ETSU CHEMICAL has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and SHIN ETSU go up and down completely randomly.
Pair Corralation between PennantPark Investment and SHIN ETSU
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.89 times more return on investment than SHIN ETSU. However, PennantPark Investment is 1.12 times less risky than SHIN ETSU. It trades about 0.06 of its potential returns per unit of risk. SHIN ETSU CHEMICAL is currently generating about 0.04 per unit of risk. If you would invest 402.00 in PennantPark Investment on September 12, 2024 and sell it today you would earn a total of 242.00 from holding PennantPark Investment or generate 60.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. SHIN ETSU CHEMICAL
Performance |
| Timeline |
| PennantPark Investment |
| SHIN ETSU CHEMICAL |
PennantPark Investment and SHIN ETSU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and SHIN ETSU
The main advantage of trading using opposite PennantPark Investment and SHIN ETSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, SHIN ETSU 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 SHIN ETSU will offset losses from the drop in SHIN ETSU'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 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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