Correlation Between PennyMac Mortgage and Amphenol
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and Amphenol 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 Amphenol 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 Amphenol, you can compare the effects of market volatilities on PennyMac Mortgage and Amphenol 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 Amphenol. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and Amphenol.
Diversification Opportunities for PennyMac Mortgage and Amphenol
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennyMac and Amphenol is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and Amphenol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphenol 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 Amphenol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphenol has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and Amphenol go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and Amphenol
Assuming the 90 days horizon PennyMac Mortgage is expected to generate 3.98 times less return on investment than Amphenol. But when comparing it to its historical volatility, PennyMac Mortgage Investment is 1.34 times less risky than Amphenol. It trades about 0.04 of its potential returns per unit of risk. Amphenol is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,056 in Amphenol on September 14, 2024 and sell it today you would earn a total of 2,926 from holding Amphenol or generate 72.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
PennyMac Mortgage Investment vs. Amphenol
Performance |
| Timeline |
| PennyMac Mortgage |
| Amphenol |
PennyMac Mortgage and Amphenol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and Amphenol
The main advantage of trading using opposite PennyMac Mortgage and Amphenol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, Amphenol 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 Amphenol will offset losses from the drop in Amphenol'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 |
| Amphenol vs. GOLD ROAD RES | Amphenol vs. QUEEN S ROAD | Amphenol vs. Fukuyama Transporting Co | Amphenol vs. PennyMac Mortgage Investment |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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