Correlation Between PennyMac Mortgage and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and Carnegie Clean 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 Carnegie Clean 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 Carnegie Clean Energy, you can compare the effects of market volatilities on PennyMac Mortgage and Carnegie Clean 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 Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and Carnegie Clean.
Diversification Opportunities for PennyMac Mortgage and Carnegie Clean
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennyMac and Carnegie is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy 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 Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and Carnegie Clean go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and Carnegie Clean
Assuming the 90 days horizon PennyMac Mortgage Investment is expected to generate 0.3 times more return on investment than Carnegie Clean. However, PennyMac Mortgage Investment is 3.28 times less risky than Carnegie Clean. It trades about 0.03 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about -0.01 per unit of risk. If you would invest 1,165 in PennyMac Mortgage Investment on November 9, 2024 and sell it today you would earn a total of 115.00 from holding PennyMac Mortgage Investment or generate 9.87% 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. Carnegie Clean Energy
Performance |
| Timeline |
| PennyMac Mortgage |
| Carnegie Clean Energy |
PennyMac Mortgage and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and Carnegie Clean
The main advantage of trading using opposite PennyMac Mortgage and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, Carnegie Clean 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 Carnegie Clean will offset losses from the drop in Carnegie Clean's long position.| PennyMac Mortgage vs. DXC Technology Co | PennyMac Mortgage vs. Calibre Mining Corp | PennyMac Mortgage vs. MCEWEN MINING INC | PennyMac Mortgage vs. Vishay Intertechnology |
| Carnegie Clean vs. Reinsurance Group of | Carnegie Clean vs. INSURANCE AUST GRP | Carnegie Clean vs. ADRIATIC METALS LS 013355 | Carnegie Clean vs. United Insurance 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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