Correlation Between Strategic Investments and PennyMac Mortgage
Can any of the company-specific risk be diversified away by investing in both Strategic Investments 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 Strategic Investments and PennyMac Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and PennyMac Mortgage Investment, you can compare the effects of market volatilities on Strategic Investments 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 Strategic Investments with a short position of PennyMac Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and PennyMac Mortgage.
Diversification Opportunities for Strategic Investments and PennyMac Mortgage
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Strategic and PennyMac is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and PennyMac Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Mortgage and Strategic Investments 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 Strategic Investments AS 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 Strategic Investments i.e., Strategic Investments and PennyMac Mortgage go up and down completely randomly.
Pair Corralation between Strategic Investments and PennyMac Mortgage
Assuming the 90 days horizon Strategic Investments is expected to generate 1.56 times less return on investment than PennyMac Mortgage. In addition to that, Strategic Investments is 2.88 times more volatile than PennyMac Mortgage Investment. It trades about 0.02 of its total potential returns per unit of risk. PennyMac Mortgage Investment is currently generating about 0.07 per unit of volatility. If you would invest 1,260 in PennyMac Mortgage Investment on September 1, 2024 and sell it today you would earn a total of 20.00 from holding PennyMac Mortgage Investment or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. PennyMac Mortgage Investment
Performance |
| Timeline |
| Strategic Investments |
| PennyMac Mortgage |
Strategic Investments and PennyMac Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and PennyMac Mortgage
The main advantage of trading using opposite Strategic Investments and PennyMac Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments 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.| Strategic Investments vs. CHINA TONTINE WINES | Strategic Investments vs. VIRGIN WINES UK | Strategic Investments vs. American Homes 4 | Strategic Investments vs. Treasury Wine Estates |
| PennyMac Mortgage vs. Superior Plus Corp | PennyMac Mortgage vs. NMI Holdings | PennyMac Mortgage vs. Origin Agritech | PennyMac Mortgage vs. SIVERS SEMICONDUCTORS AB |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |