Correlation Between PennantPark Investment and TreeHouse Foods
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and TreeHouse Foods 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 TreeHouse Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and TreeHouse Foods, you can compare the effects of market volatilities on PennantPark Investment and TreeHouse Foods 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 TreeHouse Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and TreeHouse Foods.
Diversification Opportunities for PennantPark Investment and TreeHouse Foods
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and TreeHouse is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and TreeHouse Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TreeHouse Foods 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 TreeHouse Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TreeHouse Foods has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and TreeHouse Foods go up and down completely randomly.
Pair Corralation between PennantPark Investment and TreeHouse Foods
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.63 times more return on investment than TreeHouse Foods. However, PennantPark Investment is 1.59 times less risky than TreeHouse Foods. It trades about 0.07 of its potential returns per unit of risk. TreeHouse Foods is currently generating about -0.21 per unit of risk. If you would invest 668.00 in PennantPark Investment on November 29, 2024 and sell it today you would earn a total of 13.00 from holding PennantPark Investment or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. TreeHouse Foods
Performance |
| Timeline |
| PennantPark Investment |
| TreeHouse Foods |
PennantPark Investment and TreeHouse Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and TreeHouse Foods
The main advantage of trading using opposite PennantPark Investment and TreeHouse Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, TreeHouse Foods 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 TreeHouse Foods will offset losses from the drop in TreeHouse Foods' long position.| PennantPark Investment vs. Nok Airlines PCL | PennantPark Investment vs. SOUTHWEST AIRLINES | PennantPark Investment vs. ASURE SOFTWARE | PennantPark Investment vs. JAPAN AIRLINES |
| TreeHouse Foods vs. STORAGEVAULT CANADA INC | TreeHouse Foods vs. CORNISH METALS INC | TreeHouse Foods vs. Linedata Services SA | TreeHouse Foods vs. NORTHISLE PERGOLD INC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |