Correlation Between PennyMac Mortgage and MINCO SILVER
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and MINCO SILVER 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 MINCO SILVER 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 MINCO SILVER, you can compare the effects of market volatilities on PennyMac Mortgage and MINCO SILVER 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 MINCO SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and MINCO SILVER.
Diversification Opportunities for PennyMac Mortgage and MINCO SILVER
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between PennyMac and MINCO is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and MINCO SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINCO SILVER 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 MINCO SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINCO SILVER has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and MINCO SILVER go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and MINCO SILVER
Assuming the 90 days horizon PennyMac Mortgage Investment is expected to generate 0.46 times more return on investment than MINCO SILVER. However, PennyMac Mortgage Investment is 2.18 times less risky than MINCO SILVER. It trades about 0.04 of its potential returns per unit of risk. MINCO SILVER is currently generating about 0.01 per unit of risk. If you would invest 954.00 in PennyMac Mortgage Investment on September 25, 2024 and sell it today you would earn a total of 276.00 from holding PennyMac Mortgage Investment or generate 28.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennyMac Mortgage Investment vs. MINCO SILVER
Performance |
| Timeline |
| PennyMac Mortgage |
| MINCO SILVER |
PennyMac Mortgage and MINCO SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and MINCO SILVER
The main advantage of trading using opposite PennyMac Mortgage and MINCO SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, MINCO SILVER 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 MINCO SILVER will offset losses from the drop in MINCO SILVER's long position.| PennyMac Mortgage vs. Equinix | PennyMac Mortgage vs. W P Carey | PennyMac Mortgage vs. Gaming and Leisure | PennyMac Mortgage vs. Lamar Advertising |
| MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Microsoft |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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