Correlation Between PennyMac Mortgage and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and Sunny Optical 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 Sunny Optical 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 Sunny Optical Technology, you can compare the effects of market volatilities on PennyMac Mortgage and Sunny Optical 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 Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and Sunny Optical.
Diversification Opportunities for PennyMac Mortgage and Sunny Optical
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennyMac and Sunny is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology 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 Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and Sunny Optical go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and Sunny Optical
Assuming the 90 days horizon PennyMac Mortgage is expected to generate 5.91 times less return on investment than Sunny Optical. But when comparing it to its historical volatility, PennyMac Mortgage Investment is 4.06 times less risky than Sunny Optical. It trades about 0.24 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 573.00 in Sunny Optical Technology on September 3, 2024 and sell it today you would earn a total of 180.00 from holding Sunny Optical Technology or generate 31.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennyMac Mortgage Investment vs. Sunny Optical Technology
Performance |
| Timeline |
| PennyMac Mortgage |
| Sunny Optical Technology |
PennyMac Mortgage and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and Sunny Optical
The main advantage of trading using opposite PennyMac Mortgage and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical'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 |
| Sunny Optical vs. Hon Hai Precision | Sunny Optical vs. Samsung SDI Co | Sunny Optical vs. Murata Manufacturing Co | Sunny Optical vs. Mitsubishi Electric |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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