Correlation Between PennyMac Mortgage and Jupiter Fund
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and Jupiter Fund 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 Jupiter Fund 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 Jupiter Fund Management, you can compare the effects of market volatilities on PennyMac Mortgage and Jupiter Fund 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 Jupiter Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and Jupiter Fund.
Diversification Opportunities for PennyMac Mortgage and Jupiter Fund
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PennyMac and Jupiter is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and Jupiter Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Fund Management 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 Jupiter Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Fund Management has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and Jupiter Fund go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and Jupiter Fund
Assuming the 90 days horizon PennyMac Mortgage is expected to generate 1.55 times less return on investment than Jupiter Fund. But when comparing it to its historical volatility, PennyMac Mortgage Investment is 1.22 times less risky than Jupiter Fund. It trades about 0.19 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Jupiter Fund Management on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Jupiter Fund Management or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennyMac Mortgage Investment vs. Jupiter Fund Management
Performance |
| Timeline |
| PennyMac Mortgage |
| Jupiter Fund Management |
PennyMac Mortgage and Jupiter Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and Jupiter Fund
The main advantage of trading using opposite PennyMac Mortgage and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, Jupiter Fund 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 Jupiter Fund will offset losses from the drop in Jupiter Fund's long position.| PennyMac Mortgage vs. DXC Technology Co | PennyMac Mortgage vs. X FAB Silicon Foundries | PennyMac Mortgage vs. Hyrican Informationssysteme Aktiengesellschaft | PennyMac Mortgage vs. SCOTT TECHNOLOGY |
| Jupiter Fund vs. Ameriprise Financial | Jupiter Fund vs. Ares Management Corp | Jupiter Fund vs. Superior Plus Corp | Jupiter Fund vs. NMI Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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