Correlation Between PennantPark Investment and Silver Mines
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Silver Mines 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 Silver Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Silver Mines Limited, you can compare the effects of market volatilities on PennantPark Investment and Silver Mines 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 Silver Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Silver Mines.
Diversification Opportunities for PennantPark Investment and Silver Mines
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between PennantPark and Silver is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Silver Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Mines Limited 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 Silver Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Mines Limited has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Silver Mines go up and down completely randomly.
Pair Corralation between PennantPark Investment and Silver Mines
Assuming the 90 days horizon PennantPark Investment is expected to generate 1.57 times less return on investment than Silver Mines. But when comparing it to its historical volatility, PennantPark Investment is 4.31 times less risky than Silver Mines. It trades about 0.06 of its potential returns per unit of risk. Silver Mines Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Silver Mines Limited on September 26, 2024 and sell it today you would lose (6.04) from holding Silver Mines Limited or give up 54.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Silver Mines Limited
Performance |
| Timeline |
| PennantPark Investment |
| Silver Mines Limited |
PennantPark Investment and Silver Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Silver Mines
The main advantage of trading using opposite PennantPark Investment and Silver Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Silver Mines 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 Silver Mines will offset losses from the drop in Silver Mines' long position.| PennantPark Investment vs. SPORT LISBOA E | PennantPark Investment vs. Check Point Software | PennantPark Investment vs. USWE SPORTS AB | PennantPark Investment vs. TITANIUM TRANSPORTGROUP |
| Silver Mines vs. Entravision Communications | Silver Mines vs. HEMISPHERE EGY | Silver Mines vs. Singapore Telecommunications Limited | Silver Mines 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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