Correlation Between Link Real and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Link Real 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 Link Real and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Link Real Estate and PennantPark Investment, you can compare the effects of market volatilities on Link Real 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 Link Real with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Link Real and PennantPark Investment.
Diversification Opportunities for Link Real and PennantPark Investment
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Link and PennantPark is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Link Real Estate and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Link Real 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 Link Real Estate 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 Link Real i.e., Link Real and PennantPark Investment go up and down completely randomly.
Pair Corralation between Link Real and PennantPark Investment
Assuming the 90 days horizon Link Real Estate is expected to under-perform the PennantPark Investment. In addition to that, Link Real is 2.44 times more volatile than PennantPark Investment. It trades about -0.09 of its total potential returns per unit of risk. PennantPark Investment is currently generating about 0.13 per unit of volatility. If you would invest 656.00 in PennantPark Investment on September 3, 2024 and sell it today you would earn a total of 21.00 from holding PennantPark Investment or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Link Real Estate vs. PennantPark Investment
Performance |
| Timeline |
| Link Real Estate |
| PennantPark Investment |
Link Real and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Link Real and PennantPark Investment
The main advantage of trading using opposite Link Real and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Link Real 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.| Link Real vs. Kimco Realty | Link Real vs. Simon Property Group | Link Real vs. Saul Centers | Link Real vs. Kimco Realty |
| PennantPark Investment vs. Sixth Street Specialty | PennantPark Investment vs. New Mountain Finance | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. BlackRock TCP Capital |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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