Correlation Between BlackRock and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both BlackRock and PennantPark Investment 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 BlackRock and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock and PennantPark Investment, you can compare the effects of market volatilities on BlackRock and PennantPark Investment 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 BlackRock with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and PennantPark Investment.
Diversification Opportunities for BlackRock and PennantPark Investment
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BlackRock and PennantPark is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and BlackRock 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 BlackRock are associated (or correlated) with PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of BlackRock i.e., BlackRock and PennantPark Investment go up and down completely randomly.
Pair Corralation between BlackRock and PennantPark Investment
Assuming the 90 days trading horizon BlackRock is expected to generate 0.7 times more return on investment than PennantPark Investment. However, BlackRock is 1.43 times less risky than PennantPark Investment. It trades about 0.16 of its potential returns per unit of risk. PennantPark Investment is currently generating about 0.06 per unit of risk. If you would invest 58,094 in BlackRock on August 29, 2024 and sell it today you would earn a total of 41,226 from holding BlackRock or generate 70.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.66% |
| Values | Daily Returns |
BlackRock vs. PennantPark Investment
Performance |
| Timeline |
| BlackRock |
| PennantPark Investment |
BlackRock and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock and PennantPark Investment
The main advantage of trading using opposite BlackRock and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| BlackRock vs. Microchip Technology Incorporated | BlackRock vs. AECOM TECHNOLOGY | BlackRock vs. ITALIAN WINE BRANDS | BlackRock vs. UNITED RENTALS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |