Correlation Between PennantPark Investment and Emera Maine
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Emera Maine 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 PennantPark Investment and Emera Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Emera Maine PFD, you can compare the effects of market volatilities on PennantPark Investment and Emera Maine 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 PennantPark Investment with a short position of Emera Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Emera Maine.
Diversification Opportunities for PennantPark Investment and Emera Maine
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and Emera is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Emera Maine PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Maine PFD and PennantPark Investment 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 PennantPark Investment are associated (or correlated) with Emera Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Maine PFD has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Emera Maine go up and down completely randomly.
Pair Corralation between PennantPark Investment and Emera Maine
If you would invest 9,825 in Emera Maine PFD on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Emera Maine PFD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
PennantPark Investment vs. Emera Maine PFD
Performance |
| Timeline |
| PennantPark Investment |
| Emera Maine PFD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PennantPark Investment and Emera Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Emera Maine
The main advantage of trading using opposite PennantPark Investment and Emera Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Emera Maine 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 Emera Maine will offset losses from the drop in Emera Maine's long position.| PennantPark Investment vs. Visa Class A | PennantPark Investment vs. Diamond Hill Investment | PennantPark Investment vs. Distoken Acquisition | PennantPark Investment vs. Associated Capital Group |
| Emera Maine vs. Sapiens International | Emera Maine vs. Rumble Inc | Emera Maine vs. Uber Technologies | Emera Maine vs. Asure Software |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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