Correlation Between PennyMac Finl and Home Point
Can any of the company-specific risk be diversified away by investing in both PennyMac Finl and Home Point 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 PennyMac Finl and Home Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennyMac Finl Svcs and Home Point Capital, you can compare the effects of market volatilities on PennyMac Finl and Home Point 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 PennyMac Finl with a short position of Home Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Finl and Home Point.
Diversification Opportunities for PennyMac Finl and Home Point
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennyMac and Home is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Finl Svcs and Home Point Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Point Capital and PennyMac Finl 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 PennyMac Finl Svcs are associated (or correlated) with Home Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Point Capital has no effect on the direction of PennyMac Finl i.e., PennyMac Finl and Home Point go up and down completely randomly.
Pair Corralation between PennyMac Finl and Home Point
If you would invest 10,203 in PennyMac Finl Svcs on August 27, 2024 and sell it today you would earn a total of 576.00 from holding PennyMac Finl Svcs or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
PennyMac Finl Svcs vs. Home Point Capital
Performance |
| Timeline |
| PennyMac Finl Svcs |
| Home Point Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PennyMac Finl and Home Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Finl and Home Point
The main advantage of trading using opposite PennyMac Finl and Home Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Finl position performs unexpectedly, Home Point 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 Home Point will offset losses from the drop in Home Point's long position.| PennyMac Finl vs. National Bank Holdings | PennyMac Finl vs. Community West Bancshares | PennyMac Finl vs. Financial Institutions | PennyMac Finl vs. Kearny Financial Corp |
| Home Point vs. CNFinance Holdings | Home Point vs. Security National Financial | Home Point vs. Encore Capital Group | Home Point vs. Guild Holdings Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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