Correlation Between VARIOUS EATERIES and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES 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 VARIOUS EATERIES and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and PennantPark Investment, you can compare the effects of market volatilities on VARIOUS EATERIES 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 VARIOUS EATERIES with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and PennantPark Investment.
Diversification Opportunities for VARIOUS EATERIES and PennantPark Investment
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VARIOUS and PennantPark is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and VARIOUS EATERIES 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 VARIOUS EATERIES LS 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 VARIOUS EATERIES i.e., VARIOUS EATERIES and PennantPark Investment go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and PennantPark Investment
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the PennantPark Investment. But the stock apears to be less risky and, when comparing its historical volatility, VARIOUS EATERIES LS is 1.68 times less risky than PennantPark Investment. The stock trades about -0.25 of its potential returns per unit of risk. The PennantPark Investment is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 653.00 in PennantPark Investment on October 23, 2024 and sell it today you would earn a total of 43.00 from holding PennantPark Investment or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. PennantPark Investment
Performance |
| Timeline |
| VARIOUS EATERIES |
| PennantPark Investment |
VARIOUS EATERIES and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and PennantPark Investment
The main advantage of trading using opposite VARIOUS EATERIES and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES 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.| VARIOUS EATERIES vs. ZURICH INSURANCE GROUP | VARIOUS EATERIES vs. LIFENET INSURANCE CO | VARIOUS EATERIES vs. Insurance Australia Group | VARIOUS EATERIES vs. MGIC INVESTMENT |
| PennantPark Investment vs. H2O Retailing | PennantPark Investment vs. MARKET VECTR RETAIL | PennantPark Investment vs. BOS BETTER ONLINE | PennantPark Investment vs. CARSALESCOM |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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