Correlation Between Plexus Corp and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Plexus Corp 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 Plexus Corp and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and PennantPark Investment, you can compare the effects of market volatilities on Plexus Corp 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 Plexus Corp with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and PennantPark Investment.
Diversification Opportunities for Plexus Corp and PennantPark Investment
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Plexus and PennantPark is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Plexus Corp 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 Plexus Corp 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 Plexus Corp i.e., Plexus Corp and PennantPark Investment go up and down completely randomly.
Pair Corralation between Plexus Corp and PennantPark Investment
Given the investment horizon of 90 days Plexus Corp is expected to generate 2.21 times more return on investment than PennantPark Investment. However, Plexus Corp is 2.21 times more volatile than PennantPark Investment. It trades about 0.26 of its potential returns per unit of risk. PennantPark Investment is currently generating about 0.03 per unit of risk. If you would invest 13,557 in Plexus Corp on August 24, 2024 and sell it today you would earn a total of 2,406 from holding Plexus Corp or generate 17.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. PennantPark Investment
Performance |
| Timeline |
| Plexus Corp |
| PennantPark Investment |
Plexus Corp and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and PennantPark Investment
The main advantage of trading using opposite Plexus Corp and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp 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.| Plexus Corp vs. Celestica | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Flex | Plexus Corp vs. Jabil Circuit |
| PennantPark Investment vs. DWS Municipal Income | PennantPark Investment vs. Blackrock Munivest | PennantPark Investment vs. SEI Investments | PennantPark Investment vs. SCOR PK |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |