Correlation Between PennyMac Mortgage and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and Ameriprise 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 PennyMac Mortgage and Ameriprise Financial 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 Ameriprise Financial, you can compare the effects of market volatilities on PennyMac Mortgage and Ameriprise 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 PennyMac Mortgage with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and Ameriprise Financial.
Diversification Opportunities for PennyMac Mortgage and Ameriprise Financial
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennyMac and Ameriprise is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial 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 Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and Ameriprise Financial go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and Ameriprise Financial
Assuming the 90 days horizon PennyMac Mortgage Investment is expected to generate 0.91 times more return on investment than Ameriprise Financial. However, PennyMac Mortgage Investment is 1.1 times less risky than Ameriprise Financial. It trades about 0.2 of its potential returns per unit of risk. Ameriprise Financial is currently generating about -0.22 per unit of risk. If you would invest 1,230 in PennyMac Mortgage Investment on September 20, 2024 and sell it today you would earn a total of 50.00 from holding PennyMac Mortgage Investment or generate 4.07% 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. Ameriprise Financial
Performance |
| Timeline |
| PennyMac Mortgage |
| Ameriprise Financial |
PennyMac Mortgage and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and Ameriprise Financial
The main advantage of trading using opposite PennyMac Mortgage and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, Ameriprise 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.| PennyMac Mortgage vs. Superior Plus Corp | PennyMac Mortgage vs. SIVERS SEMICONDUCTORS AB | PennyMac Mortgage vs. CHINA HUARONG ENERHD 50 | PennyMac Mortgage vs. NORDIC HALIBUT AS |
| Ameriprise Financial vs. EAT WELL INVESTMENT | Ameriprise Financial vs. AOYAMA TRADING | Ameriprise Financial vs. MGIC INVESTMENT | Ameriprise Financial vs. Chuangs China Investments |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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