Correlation Between DXC Technology and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both DXC Technology 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 DXC Technology and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DXC Technology Co and PennantPark Investment, you can compare the effects of market volatilities on DXC Technology 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 DXC Technology with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and PennantPark Investment.
Diversification Opportunities for DXC Technology and PennantPark Investment
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DXC and PennantPark is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and DXC Technology 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 DXC Technology Co 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 DXC Technology i.e., DXC Technology and PennantPark Investment go up and down completely randomly.
Pair Corralation between DXC Technology and PennantPark Investment
Assuming the 90 days trading horizon DXC Technology Co is expected to under-perform the PennantPark Investment. In addition to that, DXC Technology is 1.37 times more volatile than PennantPark Investment. It trades about 0.0 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 412.00 in PennantPark Investment on August 28, 2024 and sell it today you would earn a total of 248.00 from holding PennantPark Investment or generate 60.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXC Technology Co vs. PennantPark Investment
Performance |
| Timeline |
| DXC Technology |
| PennantPark Investment |
DXC Technology and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and PennantPark Investment
The main advantage of trading using opposite DXC Technology and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology 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.| DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc |
| PennantPark Investment vs. NORTHEAST UTILITIES | PennantPark Investment vs. LG Electronics | PennantPark Investment vs. Benchmark Electronics | PennantPark Investment vs. Ultra Clean Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |