Correlation Between CHINA VANKE and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both CHINA VANKE and PennantPark Investment 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 CHINA VANKE and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA VANKE TD and PennantPark Investment, you can compare the effects of market volatilities on CHINA VANKE and PennantPark Investment 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 CHINA VANKE with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA VANKE and PennantPark Investment.
Diversification Opportunities for CHINA VANKE and PennantPark Investment
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CHINA and PennantPark is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CHINA VANKE TD and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and CHINA VANKE 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 CHINA VANKE TD are associated (or correlated) with PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of CHINA VANKE i.e., CHINA VANKE and PennantPark Investment go up and down completely randomly.
Pair Corralation between CHINA VANKE and PennantPark Investment
Assuming the 90 days horizon CHINA VANKE TD is expected to under-perform the PennantPark Investment. In addition to that, CHINA VANKE is 1.88 times more volatile than PennantPark Investment. It trades about -0.05 of its total potential returns per unit of risk. PennantPark Investment is currently generating about -0.06 per unit of volatility. If you would invest 663.00 in PennantPark Investment on September 15, 2024 and sell it today you would lose (13.00) from holding PennantPark Investment or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CHINA VANKE TD vs. PennantPark Investment
Performance |
| Timeline |
| CHINA VANKE TD |
| PennantPark Investment |
CHINA VANKE and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA VANKE and PennantPark Investment
The main advantage of trading using opposite CHINA VANKE and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA VANKE position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| CHINA VANKE vs. Superior Plus Corp | CHINA VANKE vs. SIVERS SEMICONDUCTORS AB | CHINA VANKE vs. Reliance Steel Aluminum | CHINA VANKE vs. CHINA HUARONG ENERHD 50 |
| PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. SIVERS SEMICONDUCTORS AB |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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