Correlation Between PennantPark Investment and T-Mobile
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and T-Mobile 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 T-Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and T Mobile, you can compare the effects of market volatilities on PennantPark Investment and T-Mobile 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 T-Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and T-Mobile.
Diversification Opportunities for PennantPark Investment and T-Mobile
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and T-Mobile is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 T-Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and T-Mobile go up and down completely randomly.
Pair Corralation between PennantPark Investment and T-Mobile
Assuming the 90 days horizon PennantPark Investment is expected to under-perform the T-Mobile. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Investment is 1.12 times less risky than T-Mobile. The stock trades about -0.12 of its potential returns per unit of risk. The T Mobile is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 21,475 in T Mobile on November 4, 2024 and sell it today you would earn a total of 995.00 from holding T Mobile or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
PennantPark Investment vs. T Mobile
Performance |
| Timeline |
| PennantPark Investment |
| T Mobile |
PennantPark Investment and T-Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and T-Mobile
The main advantage of trading using opposite PennantPark Investment and T-Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, T-Mobile 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 T-Mobile will offset losses from the drop in T-Mobile's long position.| PennantPark Investment vs. Axfood AB | PennantPark Investment vs. COREBRIDGE FINANCIAL INC | PennantPark Investment vs. CN MODERN DAIRY | PennantPark Investment vs. Cal Maine Foods |
| T-Mobile vs. Reinsurance Group of | T-Mobile vs. Lendlease Group | T-Mobile vs. Japan Post Insurance | T-Mobile vs. HANOVER INSURANCE |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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