Correlation Between TIMBERCREEK FINL and PennyMac Financial
Can any of the company-specific risk be diversified away by investing in both TIMBERCREEK FINL and PennyMac Financial 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 TIMBERCREEK FINL and PennyMac Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TIMBERCREEK FINL and PennyMac Financial Services, you can compare the effects of market volatilities on TIMBERCREEK FINL and PennyMac Financial 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 TIMBERCREEK FINL with a short position of PennyMac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIMBERCREEK FINL and PennyMac Financial.
Diversification Opportunities for TIMBERCREEK FINL and PennyMac Financial
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between TIMBERCREEK and PennyMac is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding TIMBERCREEK FINL and PennyMac Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Financial and TIMBERCREEK FINL 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 TIMBERCREEK FINL are associated (or correlated) with PennyMac Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennyMac Financial has no effect on the direction of TIMBERCREEK FINL i.e., TIMBERCREEK FINL and PennyMac Financial go up and down completely randomly.
Pair Corralation between TIMBERCREEK FINL and PennyMac Financial
Assuming the 90 days horizon TIMBERCREEK FINL is expected to under-perform the PennyMac Financial. In addition to that, TIMBERCREEK FINL is 1.18 times more volatile than PennyMac Financial Services. It trades about -0.01 of its total potential returns per unit of risk. PennyMac Financial Services is currently generating about 0.05 per unit of volatility. 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 |
TIMBERCREEK FINL vs. PennyMac Financial Services
Performance |
| Timeline |
| TIMBERCREEK FINL |
| PennyMac Financial |
TIMBERCREEK FINL and PennyMac Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TIMBERCREEK FINL and PennyMac Financial
The main advantage of trading using opposite TIMBERCREEK FINL and PennyMac Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIMBERCREEK FINL position performs unexpectedly, PennyMac Financial 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 PennyMac Financial will offset losses from the drop in PennyMac Financial's long position.| TIMBERCREEK FINL vs. Chengdu PUTIAN Telecommunications | TIMBERCREEK FINL vs. Singapore Telecommunications Limited | TIMBERCREEK FINL vs. GEELY AUTOMOBILE | TIMBERCREEK FINL vs. Q2M Managementberatung AG |
| PennyMac Financial vs. Mr Cooper Group | PennyMac Financial vs. OSB GROUP PLC | PennyMac Financial vs. Deutsche Pfandbriefbank AG | PennyMac Financial 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 Stocks Directory module to find actively traded stocks across global markets.
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