Correlation Between Carnegie Clean and PennyMac Mortgage
Can any of the company-specific risk be diversified away by investing in both Carnegie Clean 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 Carnegie Clean and PennyMac Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnegie Clean Energy and PennyMac Mortgage Investment, you can compare the effects of market volatilities on Carnegie Clean 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 Carnegie Clean with a short position of PennyMac Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnegie Clean and PennyMac Mortgage.
Diversification Opportunities for Carnegie Clean and PennyMac Mortgage
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Carnegie and PennyMac is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and PennyMac Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Mortgage and Carnegie Clean 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 Carnegie Clean Energy 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 Carnegie Clean i.e., Carnegie Clean and PennyMac Mortgage go up and down completely randomly.
Pair Corralation between Carnegie Clean and PennyMac Mortgage
Assuming the 90 days trading horizon Carnegie Clean Energy is expected to under-perform the PennyMac Mortgage. In addition to that, Carnegie Clean is 3.28 times more volatile than PennyMac Mortgage Investment. It trades about -0.01 of its total potential returns per unit of risk. PennyMac Mortgage Investment is currently generating about 0.03 per unit of volatility. If you would invest 1,165 in PennyMac Mortgage Investment on November 9, 2024 and sell it today you would earn a total of 115.00 from holding PennyMac Mortgage Investment or generate 9.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnegie Clean Energy vs. PennyMac Mortgage Investment
Performance |
| Timeline |
| Carnegie Clean Energy |
| PennyMac Mortgage |
Carnegie Clean and PennyMac Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnegie Clean and PennyMac Mortgage
The main advantage of trading using opposite Carnegie Clean and PennyMac Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean 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.| Carnegie Clean vs. Reinsurance Group of | Carnegie Clean vs. INSURANCE AUST GRP | Carnegie Clean vs. ADRIATIC METALS LS 013355 | Carnegie Clean vs. United Insurance Holdings |
| PennyMac Mortgage vs. DXC Technology Co | PennyMac Mortgage vs. Calibre Mining Corp | PennyMac Mortgage vs. MCEWEN MINING INC | PennyMac Mortgage vs. Vishay Intertechnology |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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