Correlation Between VIAPLAY GROUP and PennyMac Mortgage
Can any of the company-specific risk be diversified away by investing in both VIAPLAY GROUP 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 VIAPLAY GROUP and PennyMac Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIAPLAY GROUP AB and PennyMac Mortgage Investment, you can compare the effects of market volatilities on VIAPLAY GROUP 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 VIAPLAY GROUP with a short position of PennyMac Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIAPLAY GROUP and PennyMac Mortgage.
Diversification Opportunities for VIAPLAY GROUP and PennyMac Mortgage
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VIAPLAY and PennyMac is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding VIAPLAY GROUP AB and PennyMac Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Mortgage and VIAPLAY GROUP 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 VIAPLAY GROUP AB 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 VIAPLAY GROUP i.e., VIAPLAY GROUP and PennyMac Mortgage go up and down completely randomly.
Pair Corralation between VIAPLAY GROUP and PennyMac Mortgage
Assuming the 90 days horizon VIAPLAY GROUP AB is expected to generate 10.16 times more return on investment than PennyMac Mortgage. However, VIAPLAY GROUP is 10.16 times more volatile than PennyMac Mortgage Investment. It trades about 0.02 of its potential returns per unit of risk. PennyMac Mortgage Investment is currently generating about 0.02 per unit of risk. If you would invest 1,921 in VIAPLAY GROUP AB on August 26, 2024 and sell it today you would lose (1,915) from holding VIAPLAY GROUP AB or give up 99.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIAPLAY GROUP AB vs. PennyMac Mortgage Investment
Performance |
| Timeline |
| VIAPLAY GROUP AB |
| PennyMac Mortgage |
VIAPLAY GROUP and PennyMac Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIAPLAY GROUP and PennyMac Mortgage
The main advantage of trading using opposite VIAPLAY GROUP and PennyMac Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIAPLAY GROUP 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.| VIAPLAY GROUP vs. ETFS Coffee ETC | VIAPLAY GROUP vs. SMA Solar Technology | VIAPLAY GROUP vs. FORMPIPE SOFTWARE AB | VIAPLAY GROUP vs. CPU SOFTWAREHOUSE |
| PennyMac Mortgage vs. ANTA SPORTS PRODUCT | PennyMac Mortgage vs. VIAPLAY GROUP AB | PennyMac Mortgage vs. SOLSTAD OFFSHORE NK | PennyMac Mortgage vs. SCANSOURCE |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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