Correlation Between PennantPark Investment and Crombie Real
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Crombie Real 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 Crombie Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Crombie Real Estate, you can compare the effects of market volatilities on PennantPark Investment and Crombie Real 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 Crombie Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Crombie Real.
Diversification Opportunities for PennantPark Investment and Crombie Real
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and Crombie is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Crombie Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crombie Real Estate 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 Crombie Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crombie Real Estate has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Crombie Real go up and down completely randomly.
Pair Corralation between PennantPark Investment and Crombie Real
Given the investment horizon of 90 days PennantPark Investment is expected to generate 0.69 times more return on investment than Crombie Real. However, PennantPark Investment is 1.45 times less risky than Crombie Real. It trades about 0.01 of its potential returns per unit of risk. Crombie Real Estate is currently generating about -0.06 per unit of risk. If you would invest 676.00 in PennantPark Investment on September 2, 2024 and sell it today you would earn a total of 1.00 from holding PennantPark Investment or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.75% |
| Values | Daily Returns |
PennantPark Investment vs. Crombie Real Estate
Performance |
| Timeline |
| PennantPark Investment |
| Crombie Real Estate |
PennantPark Investment and Crombie Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Crombie Real
The main advantage of trading using opposite PennantPark Investment and Crombie Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Crombie Real 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 Crombie Real will offset losses from the drop in Crombie Real'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 |
| Crombie Real vs. Modiv Inc | Crombie Real vs. Presidio Property Trust | Crombie Real vs. Medalist Diversified Reit | Crombie Real vs. Gladstone Commercial |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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