Correlation Between PennyMac Mortgage and MC Mining
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and MC Mining 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 MC Mining 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 MC Mining, you can compare the effects of market volatilities on PennyMac Mortgage and MC Mining 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 MC Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and MC Mining.
Diversification Opportunities for PennyMac Mortgage and MC Mining
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between PennyMac and G1V is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining 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 MC Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MC Mining has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and MC Mining go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and MC Mining
Assuming the 90 days horizon PennyMac Mortgage is expected to generate 222.27 times less return on investment than MC Mining. But when comparing it to its historical volatility, PennyMac Mortgage Investment is 41.93 times less risky than MC Mining. It trades about 0.04 of its potential returns per unit of risk. MC Mining is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 0.05 in MC Mining on September 13, 2024 and sell it today you would earn a total of 0.10 from holding MC Mining or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennyMac Mortgage Investment vs. MC Mining
Performance |
| Timeline |
| PennyMac Mortgage |
| MC Mining |
PennyMac Mortgage and MC Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and MC Mining
The main advantage of trading using opposite PennyMac Mortgage and MC Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, MC Mining 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 MC Mining will offset losses from the drop in MC Mining's long position.| PennyMac Mortgage vs. Selective Insurance Group | PennyMac Mortgage vs. Direct Line Insurance | PennyMac Mortgage vs. ZURICH INSURANCE GROUP | PennyMac Mortgage vs. Hyster Yale Materials Handling |
| MC Mining vs. Eastman Chemical | MC Mining vs. Major Drilling Group | MC Mining vs. Cleanaway Waste Management | MC Mining vs. ULTRA CLEAN HLDGS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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