Correlation Between PennantPark Investment and Talanx AG
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Talanx AG 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 Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Talanx AG, you can compare the effects of market volatilities on PennantPark Investment and Talanx AG 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 Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Talanx AG.
Diversification Opportunities for PennantPark Investment and Talanx AG
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and Talanx is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx 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 Talanx AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talanx AG has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Talanx AG go up and down completely randomly.
Pair Corralation between PennantPark Investment and Talanx AG
Assuming the 90 days horizon PennantPark Investment is expected to under-perform the Talanx AG. In addition to that, PennantPark Investment is 1.39 times more volatile than Talanx AG. It trades about -0.05 of its total potential returns per unit of risk. Talanx AG is currently generating about 0.54 per unit of volatility. If you would invest 7,445 in Talanx AG on September 13, 2024 and sell it today you would earn a total of 1,105 from holding Talanx AG or generate 14.84% 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. Talanx AG
Performance |
| Timeline |
| PennantPark Investment |
| Talanx AG |
PennantPark Investment and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Talanx AG
The main advantage of trading using opposite PennantPark Investment and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Talanx AG 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 Talanx AG will offset losses from the drop in Talanx AG's long position.| PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. SIVERS SEMICONDUCTORS AB |
| Talanx AG vs. Transportadora de Gas | Talanx AG vs. Amkor Technology | Talanx AG vs. DICKS Sporting Goods | Talanx AG vs. GLG LIFE TECH |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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