Correlation Between PennantPark Investment and Zalando SE
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Zalando SE 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 Zalando SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Zalando SE, you can compare the effects of market volatilities on PennantPark Investment and Zalando SE 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 Zalando SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Zalando SE.
Diversification Opportunities for PennantPark Investment and Zalando SE
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and Zalando is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Zalando SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zalando SE 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 Zalando SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zalando SE has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Zalando SE go up and down completely randomly.
Pair Corralation between PennantPark Investment and Zalando SE
Assuming the 90 days horizon PennantPark Investment is expected to generate 3.19 times less return on investment than Zalando SE. In addition to that, PennantPark Investment is 1.0 times more volatile than Zalando SE. It trades about 0.03 of its total potential returns per unit of risk. Zalando SE is currently generating about 0.1 per unit of volatility. If you would invest 2,798 in Zalando SE on September 2, 2024 and sell it today you would earn a total of 140.00 from holding Zalando SE or generate 5.0% 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. Zalando SE
Performance |
| Timeline |
| PennantPark Investment |
| Zalando SE |
PennantPark Investment and Zalando SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Zalando SE
The main advantage of trading using opposite PennantPark Investment and Zalando SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Zalando SE 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 Zalando SE will offset losses from the drop in Zalando SE's long position.| PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. NMI Holdings |
| Zalando SE vs. Corsair Gaming | Zalando SE vs. JSC Halyk bank | Zalando SE vs. Fair Isaac Corp | Zalando SE vs. ALTAIR RES INC |
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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