Correlation Between PennyMac Mortgage and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and Elmos Semiconductor 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 Elmos Semiconductor 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 Elmos Semiconductor SE, you can compare the effects of market volatilities on PennyMac Mortgage and Elmos Semiconductor 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 Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and Elmos Semiconductor.
Diversification Opportunities for PennyMac Mortgage and Elmos Semiconductor
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennyMac and Elmos is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor 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 Elmos Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmos Semiconductor has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and Elmos Semiconductor
Assuming the 90 days horizon PennyMac Mortgage Investment is expected to generate 0.43 times more return on investment than Elmos Semiconductor. However, PennyMac Mortgage Investment is 2.31 times less risky than Elmos Semiconductor. It trades about 0.01 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about -0.03 per unit of risk. If you would invest 1,278 in PennyMac Mortgage Investment on September 3, 2024 and sell it today you would earn a total of 2.00 from holding PennyMac Mortgage Investment or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennyMac Mortgage Investment vs. Elmos Semiconductor SE
Performance |
| Timeline |
| PennyMac Mortgage |
| Elmos Semiconductor |
PennyMac Mortgage and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and Elmos Semiconductor
The main advantage of trading using opposite PennyMac Mortgage and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, Elmos Semiconductor 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 Elmos Semiconductor will offset losses from the drop in Elmos Semiconductor's long position.| PennyMac Mortgage vs. Superior Plus Corp | PennyMac Mortgage vs. NMI Holdings | PennyMac Mortgage vs. Origin Agritech | PennyMac Mortgage vs. SIVERS SEMICONDUCTORS AB |
| Elmos Semiconductor vs. Datadog | Elmos Semiconductor vs. Aluminum of | Elmos Semiconductor vs. GREENX METALS LTD | Elmos Semiconductor vs. Information Services International Dentsu |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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