Correlation Between GLOBAL COSMED and PennyMac Mortgage
Can any of the company-specific risk be diversified away by investing in both GLOBAL COSMED and PennyMac Mortgage 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 GLOBAL COSMED and PennyMac Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLOBAL MED SA and PennyMac Mortgage Investment, you can compare the effects of market volatilities on GLOBAL COSMED and PennyMac Mortgage 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 GLOBAL COSMED with a short position of PennyMac Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBAL COSMED and PennyMac Mortgage.
Diversification Opportunities for GLOBAL COSMED and PennyMac Mortgage
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GLOBAL and PennyMac is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GLOBAL MED SA and PennyMac Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Mortgage and GLOBAL COSMED 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 GLOBAL MED SA are associated (or correlated) with PennyMac Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennyMac Mortgage has no effect on the direction of GLOBAL COSMED i.e., GLOBAL COSMED and PennyMac Mortgage go up and down completely randomly.
Pair Corralation between GLOBAL COSMED and PennyMac Mortgage
Assuming the 90 days horizon GLOBAL MED SA is expected to under-perform the PennyMac Mortgage. In addition to that, GLOBAL COSMED is 1.5 times more volatile than PennyMac Mortgage Investment. It trades about -0.49 of its total potential returns per unit of risk. PennyMac Mortgage Investment is currently generating about 0.34 per unit of volatility. If you would invest 1,220 in PennyMac Mortgage Investment on November 29, 2024 and sell it today you would earn a total of 110.00 from holding PennyMac Mortgage Investment or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
GLOBAL MED SA vs. PennyMac Mortgage Investment
Performance |
| Timeline |
| GLOBAL MED SA |
| PennyMac Mortgage |
GLOBAL COSMED and PennyMac Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLOBAL COSMED and PennyMac Mortgage
The main advantage of trading using opposite GLOBAL COSMED and PennyMac Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBAL COSMED position performs unexpectedly, PennyMac Mortgage 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 PennyMac Mortgage will offset losses from the drop in PennyMac Mortgage's long position.| GLOBAL COSMED vs. Air Lease | GLOBAL COSMED vs. United Rentals | GLOBAL COSMED vs. T MOBILE US | GLOBAL COSMED vs. WILLIS LEASE FIN |
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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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