Correlation Between PennyMac Financial and TIMBERCREEK FINL
Can any of the company-specific risk be diversified away by investing in both PennyMac Financial and TIMBERCREEK FINL 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 TIMBERCREEK FINL 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 TIMBERCREEK FINL, you can compare the effects of market volatilities on PennyMac Financial and TIMBERCREEK FINL 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 TIMBERCREEK FINL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Financial and TIMBERCREEK FINL.
Diversification Opportunities for PennyMac Financial and TIMBERCREEK FINL
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennyMac and TIMBERCREEK is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Financial Services and TIMBERCREEK FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMBERCREEK FINL 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 TIMBERCREEK FINL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMBERCREEK FINL has no effect on the direction of PennyMac Financial i.e., PennyMac Financial and TIMBERCREEK FINL go up and down completely randomly.
Pair Corralation between PennyMac Financial and TIMBERCREEK FINL
Assuming the 90 days horizon PennyMac Financial Services is expected to generate 0.85 times more return on investment than TIMBERCREEK FINL. However, PennyMac Financial Services is 1.18 times less risky than TIMBERCREEK FINL. It trades about 0.05 of its potential returns per unit of risk. TIMBERCREEK FINL is currently generating about -0.01 per unit of risk. If you would invest 9,569 in PennyMac Financial Services on November 2, 2024 and sell it today you would earn a total of 931.00 from holding PennyMac Financial Services or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
PennyMac Financial Services vs. TIMBERCREEK FINL
Performance |
| Timeline |
| PennyMac Financial |
| TIMBERCREEK FINL |
PennyMac Financial and TIMBERCREEK FINL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Financial and TIMBERCREEK FINL
The main advantage of trading using opposite PennyMac Financial and TIMBERCREEK FINL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Financial position performs unexpectedly, TIMBERCREEK FINL 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 TIMBERCREEK FINL will offset losses from the drop in TIMBERCREEK FINL'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 |
| TIMBERCREEK FINL vs. Chengdu PUTIAN Telecommunications | TIMBERCREEK FINL vs. Singapore Telecommunications Limited | TIMBERCREEK FINL vs. GEELY AUTOMOBILE | TIMBERCREEK FINL vs. Q2M Managementberatung AG |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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