Correlation Between PennantPark Investment and X FAB
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and X FAB 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 X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and X FAB Silicon Foundries, you can compare the effects of market volatilities on PennantPark Investment and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and X FAB.
Diversification Opportunities for PennantPark Investment and X FAB
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and XFB is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and X FAB go up and down completely randomly.
Pair Corralation between PennantPark Investment and X FAB
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.55 times more return on investment than X FAB. However, PennantPark Investment is 1.81 times less risky than X FAB. It trades about 0.02 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.04 per unit of risk. If you would invest 647.00 in PennantPark Investment on September 26, 2024 and sell it today you would earn a total of 13.00 from holding PennantPark Investment or generate 2.01% 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. X FAB Silicon Foundries
Performance |
| Timeline |
| PennantPark Investment |
| X FAB Silicon |
PennantPark Investment and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and X FAB
The main advantage of trading using opposite PennantPark Investment and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| PennantPark Investment vs. SPORT LISBOA E | PennantPark Investment vs. Check Point Software | PennantPark Investment vs. USWE SPORTS AB | PennantPark Investment vs. TITANIUM TRANSPORTGROUP |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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