Correlation Between PennyMac Mortgage and Grupo Carso
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and Grupo Carso 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 PennyMac Mortgage and Grupo Carso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennyMac Mortgage Investment and Grupo Carso SAB, you can compare the effects of market volatilities on PennyMac Mortgage and Grupo Carso 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 PennyMac Mortgage with a short position of Grupo Carso. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and Grupo Carso.
Diversification Opportunities for PennyMac Mortgage and Grupo Carso
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennyMac and Grupo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB and PennyMac 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 PennyMac Mortgage Investment are associated (or correlated) with Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and Grupo Carso go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and Grupo Carso
Assuming the 90 days horizon PennyMac Mortgage is expected to generate 1.62 times less return on investment than Grupo Carso. But when comparing it to its historical volatility, PennyMac Mortgage Investment is 1.9 times less risky than Grupo Carso. It trades about 0.03 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 525.00 in Grupo Carso SAB on October 22, 2024 and sell it today you would earn a total of 5.00 from holding Grupo Carso SAB or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennyMac Mortgage Investment vs. Grupo Carso SAB
Performance |
| Timeline |
| PennyMac Mortgage |
| Grupo Carso SAB |
PennyMac Mortgage and Grupo Carso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and Grupo Carso
The main advantage of trading using opposite PennyMac Mortgage and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, Grupo Carso 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 Grupo Carso will offset losses from the drop in Grupo Carso's long position.| PennyMac Mortgage vs. PSI Software AG | PennyMac Mortgage vs. Alfa Financial Software | PennyMac Mortgage vs. Summit Hotel Properties | PennyMac Mortgage vs. Sunstone Hotel Investors |
| Grupo Carso vs. TRAINLINE PLC LS | Grupo Carso vs. Chengdu PUTIAN Telecommunications | Grupo Carso vs. COPLAND ROAD CAPITAL | Grupo Carso vs. Charter Communications |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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