Correlation Between ITALIAN WINE and PennyMac Mortgage
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE and PennyMac Mortgage 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 ITALIAN WINE and PennyMac Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and PennyMac Mortgage Investment, you can compare the effects of market volatilities on ITALIAN WINE and PennyMac Mortgage 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 ITALIAN WINE with a short position of PennyMac Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and PennyMac Mortgage.
Diversification Opportunities for ITALIAN WINE and PennyMac Mortgage
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between ITALIAN and PennyMac is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and PennyMac Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Mortgage and ITALIAN WINE 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 ITALIAN WINE BRANDS are associated (or correlated) with PennyMac Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennyMac Mortgage has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and PennyMac Mortgage go up and down completely randomly.
Pair Corralation between ITALIAN WINE and PennyMac Mortgage
Assuming the 90 days horizon ITALIAN WINE is expected to generate 221.52 times less return on investment than PennyMac Mortgage. But when comparing it to its historical volatility, ITALIAN WINE BRANDS is 1.36 times less risky than PennyMac Mortgage. It trades about 0.0 of its potential returns per unit of risk. PennyMac Mortgage Investment is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,180 in PennyMac Mortgage Investment on November 28, 2024 and sell it today you would earn a total of 150.00 from holding PennyMac Mortgage Investment or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. PennyMac Mortgage Investment
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| PennyMac Mortgage |
ITALIAN WINE and PennyMac Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and PennyMac Mortgage
The main advantage of trading using opposite ITALIAN WINE and PennyMac Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE position performs unexpectedly, PennyMac Mortgage 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 Mortgage will offset losses from the drop in PennyMac Mortgage's long position.| ITALIAN WINE vs. Penn National Gaming | ITALIAN WINE vs. OURGAME INTHOLDL 00005 | ITALIAN WINE vs. EEDUCATION ALBERT AB | ITALIAN WINE vs. BRAGG GAMING GRP |
| PennyMac Mortgage vs. INDO RAMA SYNTHETIC | PennyMac Mortgage vs. IRONVELD PLC LS | PennyMac Mortgage vs. Daido Steel Co | PennyMac Mortgage vs. KINGBOARD CHEMICAL |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |