Correlation Between Distoken Acquisition and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Distoken Acquisition 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 Distoken Acquisition and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Distoken Acquisition and PennantPark Investment, you can compare the effects of market volatilities on Distoken Acquisition 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 Distoken Acquisition with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distoken Acquisition and PennantPark Investment.
Diversification Opportunities for Distoken Acquisition and PennantPark Investment
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Distoken and PennantPark is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Distoken Acquisition 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 Distoken Acquisition 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 Distoken Acquisition i.e., Distoken Acquisition and PennantPark Investment go up and down completely randomly.
Pair Corralation between Distoken Acquisition and PennantPark Investment
Given the investment horizon of 90 days Distoken Acquisition is expected to generate 38.18 times more return on investment than PennantPark Investment. However, Distoken Acquisition is 38.18 times more volatile than PennantPark Investment. It trades about 0.05 of its potential returns per unit of risk. PennantPark Investment is currently generating about 0.07 per unit of risk. If you would invest 0.00 in Distoken Acquisition on August 30, 2024 and sell it today you would earn a total of 1,137 from holding Distoken Acquisition or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.05% |
| Values | Daily Returns |
Distoken Acquisition vs. PennantPark Investment
Performance |
| Timeline |
| Distoken Acquisition |
| PennantPark Investment |
Distoken Acquisition and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distoken Acquisition and PennantPark Investment
The main advantage of trading using opposite Distoken Acquisition and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distoken Acquisition 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.| Distoken Acquisition vs. Air Lease | Distoken Acquisition vs. Ryanair Holdings PLC | Distoken Acquisition vs. Mesa Air Group | Distoken Acquisition vs. Aldel Financial II |
| PennantPark Investment vs. TPG Inc | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. Brookfield Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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