Correlation Between Maxus Realty and PennyMac Mortgage
Can any of the company-specific risk be diversified away by investing in both Maxus Realty 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 Maxus Realty and PennyMac Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxus Realty Trust and PennyMac Mortgage Investment, you can compare the effects of market volatilities on Maxus Realty 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 Maxus Realty with a short position of PennyMac Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxus Realty and PennyMac Mortgage.
Diversification Opportunities for Maxus Realty and PennyMac Mortgage
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maxus and PennyMac is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Maxus Realty Trust and PennyMac Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Mortgage and Maxus Realty 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 Maxus Realty Trust 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 Maxus Realty i.e., Maxus Realty and PennyMac Mortgage go up and down completely randomly.
Pair Corralation between Maxus Realty and PennyMac Mortgage
If you would invest 12,000 in Maxus Realty Trust on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Maxus Realty Trust or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Maxus Realty Trust vs. PennyMac Mortgage Investment
Performance |
| Timeline |
| Maxus Realty Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PennyMac Mortgage |
Maxus Realty and PennyMac Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maxus Realty and PennyMac Mortgage
The main advantage of trading using opposite Maxus Realty and PennyMac Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxus Realty 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.The idea behind Maxus Realty Trust and PennyMac Mortgage Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PennyMac Mortgage vs. Rithm Capital Corp | PennyMac Mortgage vs. Chimera Investment | PennyMac Mortgage vs. Two Harbors Investment | PennyMac Mortgage vs. ARMOUR Residential REIT |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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