Correlation Between PennantPark Investment and China Power
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and China Power 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 China Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and China Power Equipment, you can compare the effects of market volatilities on PennantPark Investment and China Power 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 China Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and China Power.
Diversification Opportunities for PennantPark Investment and China Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PennantPark and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and China Power Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Power Equipment 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 China Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Power Equipment has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and China Power go up and down completely randomly.
Pair Corralation between PennantPark Investment and China Power
If you would invest 684.00 in PennantPark Investment on October 23, 2024 and sell it today you would earn a total of 10.00 from holding PennantPark Investment or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
PennantPark Investment vs. China Power Equipment
Performance |
| Timeline |
| PennantPark Investment |
| China Power Equipment |
PennantPark Investment and China Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and China Power
The main advantage of trading using opposite PennantPark Investment and China Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, China Power 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 China Power will offset losses from the drop in China Power's long position.| PennantPark Investment vs. Sixth Street Specialty | PennantPark Investment vs. New Mountain Finance | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. BlackRock TCP Capital |
| China Power vs. enVVeno Medical Corp | China Power vs. Asure Software | China Power vs. Joint Stock | China Power vs. NetSol Technologies |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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