Correlation Between PennantPark Investment and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Thai Beverage 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 Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Thai Beverage Public, you can compare the effects of market volatilities on PennantPark Investment and Thai Beverage 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 Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Thai Beverage.
Diversification Opportunities for PennantPark Investment and Thai Beverage
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and Thai is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Thai Beverage Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage Public 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 Thai Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Beverage Public has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Thai Beverage go up and down completely randomly.
Pair Corralation between PennantPark Investment and Thai Beverage
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.51 times more return on investment than Thai Beverage. However, PennantPark Investment is 1.96 times less risky than Thai Beverage. It trades about 0.18 of its potential returns per unit of risk. Thai Beverage Public is currently generating about -0.05 per unit of risk. If you would invest 645.00 in PennantPark Investment on October 21, 2024 and sell it today you would earn a total of 43.00 from holding PennantPark Investment or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Thai Beverage Public
Performance |
| Timeline |
| PennantPark Investment |
| Thai Beverage Public |
PennantPark Investment and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Thai Beverage
The main advantage of trading using opposite PennantPark Investment and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Thai Beverage 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 Thai Beverage will offset losses from the drop in Thai Beverage's long position.| PennantPark Investment vs. DATATEC LTD 2 | PennantPark Investment vs. MICRONIC MYDATA | PennantPark Investment vs. HEMISPHERE EGY | PennantPark Investment vs. COMPUTERSHARE |
| Thai Beverage vs. EAT WELL INVESTMENT | Thai Beverage vs. Sumitomo Mitsui Construction | Thai Beverage vs. Chongqing Machinery Electric | Thai Beverage 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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