Correlation Between PennantPark Investment and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Magnachip Semiconductor 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 Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Magnachip Semiconductor, you can compare the effects of market volatilities on PennantPark Investment and Magnachip Semiconductor 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 Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Magnachip Semiconductor.
Diversification Opportunities for PennantPark Investment and Magnachip Semiconductor
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and Magnachip is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor 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 Magnachip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnachip Semiconductor has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between PennantPark Investment and Magnachip Semiconductor
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.6 times more return on investment than Magnachip Semiconductor. However, PennantPark Investment is 1.67 times less risky than Magnachip Semiconductor. It trades about 0.03 of its potential returns per unit of risk. Magnachip Semiconductor is currently generating about -0.03 per unit of risk. If you would invest 593.00 in PennantPark Investment on September 3, 2024 and sell it today you would earn a total of 39.00 from holding PennantPark Investment or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Magnachip Semiconductor
Performance |
| Timeline |
| PennantPark Investment |
| Magnachip Semiconductor |
PennantPark Investment and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Magnachip Semiconductor
The main advantage of trading using opposite PennantPark Investment and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Magnachip Semiconductor 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 Magnachip Semiconductor will offset losses from the drop in Magnachip Semiconductor's long position.| PennantPark Investment vs. Blackstone Group | PennantPark Investment vs. BlackRock | PennantPark Investment vs. The Bank of | PennantPark Investment vs. Ameriprise Financial |
| Magnachip Semiconductor vs. Virtus Investment Partners | Magnachip Semiconductor vs. PennantPark Investment | Magnachip Semiconductor vs. MGIC INVESTMENT | Magnachip Semiconductor vs. HK Electric Investments |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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