Correlation Between GEELY AUTOMOBILE and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE 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 GEELY AUTOMOBILE and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and PennantPark Investment, you can compare the effects of market volatilities on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and PennantPark Investment.
Diversification Opportunities for GEELY AUTOMOBILE and PennantPark Investment
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GEELY and PennantPark is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and PennantPark Investment go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and PennantPark Investment
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to under-perform the PennantPark Investment. But the stock apears to be less risky and, when comparing its historical volatility, GEELY AUTOMOBILE is 1.26 times less risky than PennantPark Investment. The stock trades about -0.34 of its potential returns per unit of risk. The PennantPark Investment is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 645.00 in PennantPark Investment on October 12, 2024 and sell it today you would earn a total of 45.00 from holding PennantPark Investment or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. PennantPark Investment
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| PennantPark Investment |
GEELY AUTOMOBILE and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and PennantPark Investment
The main advantage of trading using opposite GEELY AUTOMOBILE and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE 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.| GEELY AUTOMOBILE vs. HK Electric Investments | GEELY AUTOMOBILE vs. Virtus Investment Partners | GEELY AUTOMOBILE vs. CITY OFFICE REIT | GEELY AUTOMOBILE vs. British American Tobacco |
| PennantPark Investment vs. Nomad Foods | PennantPark Investment vs. GEELY AUTOMOBILE | PennantPark Investment vs. MTY Food Group | PennantPark Investment vs. Spirent Communications plc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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