Correlation Between Jack Nathan and Pennant
Can any of the company-specific risk be diversified away by investing in both Jack Nathan and Pennant 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 Jack Nathan and Pennant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jack Nathan Medical and Pennant Group, you can compare the effects of market volatilities on Jack Nathan and Pennant 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 Jack Nathan with a short position of Pennant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jack Nathan and Pennant.
Diversification Opportunities for Jack Nathan and Pennant
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jack and Pennant is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jack Nathan Medical and Pennant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pennant Group and Jack Nathan 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 Jack Nathan Medical are associated (or correlated) with Pennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pennant Group has no effect on the direction of Jack Nathan i.e., Jack Nathan and Pennant go up and down completely randomly.
Pair Corralation between Jack Nathan and Pennant
Assuming the 90 days horizon Jack Nathan is expected to generate 1.16 times less return on investment than Pennant. In addition to that, Jack Nathan is 3.85 times more volatile than Pennant Group. It trades about 0.03 of its total potential returns per unit of risk. Pennant Group is currently generating about 0.15 per unit of volatility. If you would invest 1,392 in Pennant Group on August 25, 2024 and sell it today you would earn a total of 1,722 from holding Pennant Group or generate 123.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jack Nathan Medical vs. Pennant Group
Performance |
| Timeline |
| Jack Nathan Medical |
| Pennant Group |
Jack Nathan and Pennant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jack Nathan and Pennant
The main advantage of trading using opposite Jack Nathan and Pennant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack Nathan position performs unexpectedly, Pennant 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 Pennant will offset losses from the drop in Pennant's long position.| Jack Nathan vs. IMAC Holdings | Jack Nathan vs. HCA Holdings | Jack Nathan vs. HUMANA INC | Jack Nathan vs. SCOR PK |
| Pennant vs. Encompass Health Corp | Pennant vs. Acadia Healthcare | Pennant vs. Select Medical Holdings | Pennant vs. Addus HomeCare |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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