Correlation Between PennyMac Mortgage and Forsys Metals
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and Forsys Metals 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 Forsys Metals 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 Forsys Metals Corp, you can compare the effects of market volatilities on PennyMac Mortgage and Forsys Metals 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 Forsys Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and Forsys Metals.
Diversification Opportunities for PennyMac Mortgage and Forsys Metals
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PennyMac and Forsys is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and Forsys Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forsys Metals Corp 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 Forsys Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forsys Metals Corp has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and Forsys Metals go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and Forsys Metals
Assuming the 90 days horizon PennyMac Mortgage Investment is expected to under-perform the Forsys Metals. But the stock apears to be less risky and, when comparing its historical volatility, PennyMac Mortgage Investment is 4.68 times less risky than Forsys Metals. The stock trades about -0.15 of its potential returns per unit of risk. The Forsys Metals Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 42.00 in Forsys Metals Corp on October 12, 2024 and sell it today you would earn a total of 5.00 from holding Forsys Metals Corp or generate 11.9% 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. Forsys Metals Corp
Performance |
| Timeline |
| PennyMac Mortgage |
| Forsys Metals Corp |
PennyMac Mortgage and Forsys Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and Forsys Metals
The main advantage of trading using opposite PennyMac Mortgage and Forsys Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, Forsys Metals 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 Forsys Metals will offset losses from the drop in Forsys Metals' long position.| PennyMac Mortgage vs. ALGOMA STEEL GROUP | PennyMac Mortgage vs. TOMBADOR IRON LTD | PennyMac Mortgage vs. STEEL DYNAMICS | PennyMac Mortgage vs. PLAYMATES TOYS |
| Forsys Metals vs. Advanced Medical Solutions | Forsys Metals vs. PennyMac Mortgage Investment | Forsys Metals vs. CompuGroup Medical SE | Forsys Metals vs. AVITA Medical |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |