Correlation Between PennyMac Mortgage and ASURE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and ASURE SOFTWARE 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 ASURE SOFTWARE 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 ASURE SOFTWARE, you can compare the effects of market volatilities on PennyMac Mortgage and ASURE SOFTWARE 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 ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and ASURE SOFTWARE.
Diversification Opportunities for PennyMac Mortgage and ASURE SOFTWARE
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennyMac and ASURE is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE 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 ASURE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASURE SOFTWARE has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and ASURE SOFTWARE go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and ASURE SOFTWARE
Assuming the 90 days horizon PennyMac Mortgage Investment is expected to generate 0.52 times more return on investment than ASURE SOFTWARE. However, PennyMac Mortgage Investment is 1.93 times less risky than ASURE SOFTWARE. It trades about 0.04 of its potential returns per unit of risk. ASURE SOFTWARE is currently generating about 0.02 per unit of risk. If you would invest 1,012 in PennyMac Mortgage Investment on September 3, 2024 and sell it today you would earn a total of 268.00 from holding PennyMac Mortgage Investment or generate 26.48% 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. ASURE SOFTWARE
Performance |
| Timeline |
| PennyMac Mortgage |
| ASURE SOFTWARE |
PennyMac Mortgage and ASURE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and ASURE SOFTWARE
The main advantage of trading using opposite PennyMac Mortgage and ASURE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, ASURE SOFTWARE 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 ASURE SOFTWARE will offset losses from the drop in ASURE SOFTWARE'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 |
| ASURE SOFTWARE vs. TOTAL GABON | ASURE SOFTWARE vs. Walgreens Boots Alliance | ASURE SOFTWARE vs. Peak Resources Limited |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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