Correlation Between PennyMac Mortgage and Lyft
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and Lyft 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 Lyft 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 Lyft Inc, you can compare the effects of market volatilities on PennyMac Mortgage and Lyft 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 Lyft. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and Lyft.
Diversification Opportunities for PennyMac Mortgage and Lyft
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennyMac and Lyft is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and Lyft Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyft Inc 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 Lyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyft Inc has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and Lyft go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and Lyft
Assuming the 90 days horizon PennyMac Mortgage is expected to generate 4.2 times less return on investment than Lyft. But when comparing it to its historical volatility, PennyMac Mortgage Investment is 3.41 times less risky than Lyft. It trades about 0.02 of its potential returns per unit of risk. Lyft Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,383 in Lyft Inc on September 14, 2024 and sell it today you would earn a total of 42.00 from holding Lyft Inc or generate 3.04% 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. Lyft Inc
Performance |
| Timeline |
| PennyMac Mortgage |
| Lyft Inc |
PennyMac Mortgage and Lyft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and Lyft
The main advantage of trading using opposite PennyMac Mortgage and Lyft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, Lyft 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 Lyft will offset losses from the drop in Lyft's long position.| PennyMac Mortgage vs. Superior Plus Corp | PennyMac Mortgage vs. SIVERS SEMICONDUCTORS AB | PennyMac Mortgage vs. CHINA HUARONG ENERHD 50 | PennyMac Mortgage vs. NORDIC HALIBUT AS |
| Lyft vs. OAKTRSPECLENDNEW | Lyft vs. The Hanover Insurance | Lyft vs. REVO INSURANCE SPA | Lyft vs. Tradegate AG Wertpapierhandelsbank |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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