Correlation Between NISSIN FOODS and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both NISSIN FOODS 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 NISSIN FOODS and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NISSIN FOODS HLDGS and PennantPark Investment, you can compare the effects of market volatilities on NISSIN FOODS 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 NISSIN FOODS with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NISSIN FOODS and PennantPark Investment.
Diversification Opportunities for NISSIN FOODS and PennantPark Investment
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NISSIN and PennantPark is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding NISSIN FOODS HLDGS and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and NISSIN FOODS 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 NISSIN FOODS HLDGS 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 NISSIN FOODS i.e., NISSIN FOODS and PennantPark Investment go up and down completely randomly.
Pair Corralation between NISSIN FOODS and PennantPark Investment
Assuming the 90 days trading horizon NISSIN FOODS HLDGS is expected to under-perform the PennantPark Investment. But the stock apears to be less risky and, when comparing its historical volatility, NISSIN FOODS HLDGS is 1.11 times less risky than PennantPark Investment. The stock trades about 0.0 of its potential returns per unit of risk. The PennantPark Investment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 438.00 in PennantPark Investment on September 2, 2024 and sell it today you would earn a total of 194.00 from holding PennantPark Investment or generate 44.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NISSIN FOODS HLDGS vs. PennantPark Investment
Performance |
| Timeline |
| NISSIN FOODS HLDGS |
| PennantPark Investment |
NISSIN FOODS and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NISSIN FOODS and PennantPark Investment
The main advantage of trading using opposite NISSIN FOODS and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NISSIN FOODS 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.| NISSIN FOODS vs. SIVERS SEMICONDUCTORS AB | NISSIN FOODS vs. Darden Restaurants | NISSIN FOODS vs. Reliance Steel Aluminum | NISSIN FOODS vs. Q2M Managementberatung AG |
| PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. NMI Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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