Correlation Between ATRIUM MORTGAGE and PennyMac Financial
Can any of the company-specific risk be diversified away by investing in both ATRIUM MORTGAGE 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 ATRIUM MORTGAGE and PennyMac Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRIUM MORTGAGE INVESTM and PennyMac Financial Services, you can compare the effects of market volatilities on ATRIUM MORTGAGE 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 ATRIUM MORTGAGE with a short position of PennyMac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRIUM MORTGAGE and PennyMac Financial.
Diversification Opportunities for ATRIUM MORTGAGE and PennyMac Financial
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ATRIUM and PennyMac is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ATRIUM MORTGAGE INVESTM and PennyMac Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Financial and ATRIUM MORTGAGE 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 ATRIUM MORTGAGE INVESTM 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 ATRIUM MORTGAGE i.e., ATRIUM MORTGAGE and PennyMac Financial go up and down completely randomly.
Pair Corralation between ATRIUM MORTGAGE and PennyMac Financial
Assuming the 90 days horizon ATRIUM MORTGAGE INVESTM is expected to under-perform the PennyMac Financial. But the stock apears to be less risky and, when comparing its historical volatility, ATRIUM MORTGAGE INVESTM is 1.75 times less risky than PennyMac Financial. The stock trades about -0.03 of its potential returns per unit of risk. The PennyMac Financial Services is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 9,500 in PennyMac Financial Services on October 20, 2024 and sell it today you would earn a total of 700.00 from holding PennyMac Financial Services or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATRIUM MORTGAGE INVESTM vs. PennyMac Financial Services
Performance |
| Timeline |
| ATRIUM MORTGAGE INVESTM |
| PennyMac Financial |
ATRIUM MORTGAGE and PennyMac Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRIUM MORTGAGE and PennyMac Financial
The main advantage of trading using opposite ATRIUM MORTGAGE and PennyMac Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRIUM MORTGAGE 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.| ATRIUM MORTGAGE vs. Mr Cooper Group | ATRIUM MORTGAGE vs. PennyMac Financial Services | ATRIUM MORTGAGE vs. OSB GROUP PLC | ATRIUM MORTGAGE vs. FIRST NATIONAL FIN |
| PennyMac Financial vs. ELECTRONIC ARTS | PennyMac Financial vs. Tower Semiconductor | PennyMac Financial vs. Samsung Electronics Co | PennyMac Financial vs. RYU Apparel |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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