Correlation Between PennyMac Mortgage and INTERCONT HOTELS
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and INTERCONT HOTELS 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 INTERCONT HOTELS 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 INTERCONT HOTELS, you can compare the effects of market volatilities on PennyMac Mortgage and INTERCONT HOTELS 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 INTERCONT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and INTERCONT HOTELS.
Diversification Opportunities for PennyMac Mortgage and INTERCONT HOTELS
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PennyMac and INTERCONT is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and INTERCONT HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERCONT HOTELS 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 INTERCONT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERCONT HOTELS has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and INTERCONT HOTELS go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and INTERCONT HOTELS
Assuming the 90 days horizon PennyMac Mortgage Investment is expected to under-perform the INTERCONT HOTELS. In addition to that, PennyMac Mortgage is 1.45 times more volatile than INTERCONT HOTELS. It trades about -0.15 of its total potential returns per unit of risk. INTERCONT HOTELS is currently generating about -0.06 per unit of volatility. If you would invest 11,800 in INTERCONT HOTELS on October 12, 2024 and sell it today you would lose (100.00) from holding INTERCONT HOTELS or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennyMac Mortgage Investment vs. INTERCONT HOTELS
Performance |
| Timeline |
| PennyMac Mortgage |
| INTERCONT HOTELS |
PennyMac Mortgage and INTERCONT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and INTERCONT HOTELS
The main advantage of trading using opposite PennyMac Mortgage and INTERCONT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, INTERCONT HOTELS 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 INTERCONT HOTELS will offset losses from the drop in INTERCONT HOTELS's long position.| PennyMac Mortgage vs. ALGOMA STEEL GROUP | PennyMac Mortgage vs. TOMBADOR IRON LTD | PennyMac Mortgage vs. STEEL DYNAMICS | PennyMac Mortgage vs. PLAYMATES TOYS |
| INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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