Correlation Between MAG Silver and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both MAG Silver 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 MAG Silver and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG Silver Corp and PennantPark Investment, you can compare the effects of market volatilities on MAG Silver 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 MAG Silver with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and PennantPark Investment.
Diversification Opportunities for MAG Silver and PennantPark Investment
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MAG and PennantPark is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and MAG Silver 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 MAG Silver Corp 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 MAG Silver i.e., MAG Silver and PennantPark Investment go up and down completely randomly.
Pair Corralation between MAG Silver and PennantPark Investment
Assuming the 90 days horizon MAG Silver is expected to generate 1.45 times less return on investment than PennantPark Investment. In addition to that, MAG Silver is 1.61 times more volatile than PennantPark Investment. It trades about 0.03 of its total potential returns per unit of risk. PennantPark Investment is currently generating about 0.06 per unit of volatility. If you would invest 409.00 in PennantPark Investment on October 28, 2024 and sell it today you would earn a total of 252.00 from holding PennantPark Investment or generate 61.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. PennantPark Investment
Performance |
| Timeline |
| MAG Silver Corp |
| PennantPark Investment |
MAG Silver and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and PennantPark Investment
The main advantage of trading using opposite MAG Silver and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver 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.| MAG Silver vs. ANTA SPORTS PRODUCT | MAG Silver vs. GMO Internet | MAG Silver vs. ZINC MEDIA GR | MAG Silver vs. Wayside Technology Group |
| PennantPark Investment vs. RETAIL FOOD GROUP | PennantPark Investment vs. JIAHUA STORES | PennantPark Investment vs. FAST RETAIL ADR | PennantPark Investment vs. Daito Trust Construction |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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