Correlation Between PennantPark Investment and Vishay Intertechnology
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Vishay Intertechnology 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 Vishay Intertechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Vishay Intertechnology, you can compare the effects of market volatilities on PennantPark Investment and Vishay Intertechnology 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 Vishay Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Vishay Intertechnology.
Diversification Opportunities for PennantPark Investment and Vishay Intertechnology
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and Vishay is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology 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 Vishay Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Vishay Intertechnology go up and down completely randomly.
Pair Corralation between PennantPark Investment and Vishay Intertechnology
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.92 times more return on investment than Vishay Intertechnology. However, PennantPark Investment is 1.08 times less risky than Vishay Intertechnology. It trades about 0.06 of its potential returns per unit of risk. Vishay Intertechnology is currently generating about -0.01 per unit of risk. If you would invest 411.00 in PennantPark Investment on October 12, 2024 and sell it today you would earn a total of 279.00 from holding PennantPark Investment or generate 67.88% 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. Vishay Intertechnology
Performance |
| Timeline |
| PennantPark Investment |
| Vishay Intertechnology |
PennantPark Investment and Vishay Intertechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Vishay Intertechnology
The main advantage of trading using opposite PennantPark Investment and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Vishay Intertechnology 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 Vishay Intertechnology will offset losses from the drop in Vishay Intertechnology's long position.| PennantPark Investment vs. Nomad Foods | PennantPark Investment vs. GEELY AUTOMOBILE | PennantPark Investment vs. MTY Food Group | PennantPark Investment vs. Spirent Communications plc |
| Vishay Intertechnology vs. PennantPark Investment | Vishay Intertechnology vs. Ultra Clean Holdings | Vishay Intertechnology vs. ECHO INVESTMENT ZY | Vishay Intertechnology vs. Japan Asia 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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