Correlation Between Home Point and PennyMac Finl
Can any of the company-specific risk be diversified away by investing in both Home Point and PennyMac Finl 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 Home Point and PennyMac Finl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Point Capital and PennyMac Finl Svcs, you can compare the effects of market volatilities on Home Point and PennyMac Finl 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 Home Point with a short position of PennyMac Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Point and PennyMac Finl.
Diversification Opportunities for Home Point and PennyMac Finl
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Home and PennyMac is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Home Point Capital and PennyMac Finl Svcs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Finl Svcs and Home Point 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 Home Point Capital are associated (or correlated) with PennyMac Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennyMac Finl Svcs has no effect on the direction of Home Point i.e., Home Point and PennyMac Finl go up and down completely randomly.
Pair Corralation between Home Point and PennyMac Finl
If you would invest 10,203 in PennyMac Finl Svcs on August 27, 2024 and sell it today you would earn a total of 576.00 from holding PennyMac Finl Svcs or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Home Point Capital vs. PennyMac Finl Svcs
Performance |
| Timeline |
| Home Point Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PennyMac Finl Svcs |
Home Point and PennyMac Finl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Point and PennyMac Finl
The main advantage of trading using opposite Home Point and PennyMac Finl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Point position performs unexpectedly, PennyMac Finl 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 Finl will offset losses from the drop in PennyMac Finl's long position.| Home Point vs. CNFinance Holdings | Home Point vs. Security National Financial | Home Point vs. Encore Capital Group | Home Point vs. Guild Holdings Co |
| PennyMac Finl vs. National Bank Holdings | PennyMac Finl vs. Community West Bancshares | PennyMac Finl vs. Financial Institutions | PennyMac Finl vs. Kearny Financial 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |