Correlation Between PennyMac Financial and OSB GROUP
Can any of the company-specific risk be diversified away by investing in both PennyMac Financial and OSB GROUP 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 PennyMac Financial and OSB GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennyMac Financial Services and OSB GROUP PLC, you can compare the effects of market volatilities on PennyMac Financial and OSB GROUP 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 PennyMac Financial with a short position of OSB GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Financial and OSB GROUP.
Diversification Opportunities for PennyMac Financial and OSB GROUP
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennyMac and OSB is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Financial Services and OSB GROUP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSB GROUP PLC and PennyMac Financial 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 PennyMac Financial Services are associated (or correlated) with OSB GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSB GROUP PLC has no effect on the direction of PennyMac Financial i.e., PennyMac Financial and OSB GROUP go up and down completely randomly.
Pair Corralation between PennyMac Financial and OSB GROUP
Assuming the 90 days horizon PennyMac Financial is expected to generate 1.22 times less return on investment than OSB GROUP. But when comparing it to its historical volatility, PennyMac Financial Services is 1.15 times less risky than OSB GROUP. It trades about 0.05 of its potential returns per unit of risk. OSB GROUP PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 426.00 in OSB GROUP PLC on November 2, 2024 and sell it today you would earn a total of 50.00 from holding OSB GROUP PLC or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennyMac Financial Services vs. OSB GROUP PLC
Performance |
| Timeline |
| PennyMac Financial |
| OSB GROUP PLC |
PennyMac Financial and OSB GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Financial and OSB GROUP
The main advantage of trading using opposite PennyMac Financial and OSB GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Financial position performs unexpectedly, OSB GROUP 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 OSB GROUP will offset losses from the drop in OSB GROUP's long position.| PennyMac Financial vs. Mr Cooper Group | PennyMac Financial vs. OSB GROUP PLC | PennyMac Financial vs. Deutsche Pfandbriefbank AG | PennyMac Financial vs. ELLINGTON FINL INC |
| OSB GROUP vs. Mr Cooper Group | OSB GROUP vs. PennyMac Financial Services | OSB GROUP vs. Deutsche Pfandbriefbank AG | OSB GROUP vs. ELLINGTON FINL 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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