Correlation Between PennantPark Investment and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Thyssenkrupp 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 Thyssenkrupp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and thyssenkrupp AG, you can compare the effects of market volatilities on PennantPark Investment and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Thyssenkrupp.
Diversification Opportunities for PennantPark Investment and Thyssenkrupp
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and Thyssenkrupp is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Thyssenkrupp go up and down completely randomly.
Pair Corralation between PennantPark Investment and Thyssenkrupp
Assuming the 90 days horizon PennantPark Investment is expected to under-perform the Thyssenkrupp. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Investment is 2.19 times less risky than Thyssenkrupp. The stock trades about -0.02 of its potential returns per unit of risk. The thyssenkrupp AG is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 380.00 in thyssenkrupp AG on November 6, 2024 and sell it today you would earn a total of 82.00 from holding thyssenkrupp AG or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
PennantPark Investment vs. thyssenkrupp AG
Performance |
| Timeline |
| PennantPark Investment |
| thyssenkrupp AG |
PennantPark Investment and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Thyssenkrupp
The main advantage of trading using opposite PennantPark Investment and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| PennantPark Investment vs. Ribbon Communications | PennantPark Investment vs. ecotel communication ag | PennantPark Investment vs. Casio Computer CoLtd | PennantPark Investment vs. Tokyu Construction Co |
| Thyssenkrupp vs. Discover Financial Services | Thyssenkrupp vs. PLANT VEDA FOODS | Thyssenkrupp vs. CN MODERN DAIRY | Thyssenkrupp vs. JSC Halyk bank |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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