Correlation Between Suntory Beverage and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage 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 Suntory Beverage and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and PennantPark Investment, you can compare the effects of market volatilities on Suntory Beverage 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 Suntory Beverage with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and PennantPark Investment.
Diversification Opportunities for Suntory Beverage and PennantPark Investment
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Suntory and PennantPark is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Suntory Beverage 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 Suntory Beverage Food 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 Suntory Beverage i.e., Suntory Beverage and PennantPark Investment go up and down completely randomly.
Pair Corralation between Suntory Beverage and PennantPark Investment
Assuming the 90 days horizon Suntory Beverage Food is expected to under-perform the PennantPark Investment. But the stock apears to be less risky and, when comparing its historical volatility, Suntory Beverage Food is 2.36 times less risky than PennantPark Investment. The stock trades about -0.04 of its potential returns per unit of risk. The PennantPark Investment is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 677.00 in PennantPark Investment on November 7, 2024 and sell it today you would lose (8.00) from holding PennantPark Investment or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. PennantPark Investment
Performance |
| Timeline |
| Suntory Beverage Food |
| PennantPark Investment |
Suntory Beverage and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and PennantPark Investment
The main advantage of trading using opposite Suntory Beverage and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage 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.| Suntory Beverage vs. Nishi Nippon Railroad Co | Suntory Beverage vs. BROADPEAK SA EO | Suntory Beverage vs. Television Broadcasts Limited | Suntory Beverage vs. SOLSTAD OFFSHORE NK |
| PennantPark Investment vs. Ribbon Communications | PennantPark Investment vs. ecotel communication ag | PennantPark Investment vs. Casio Computer CoLtd | PennantPark Investment vs. Tokyu Construction Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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