Correlation Between PennantPark Investment and Dixons Carphone
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Dixons Carphone 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 Dixons Carphone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Dixons Carphone plc, you can compare the effects of market volatilities on PennantPark Investment and Dixons Carphone 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 Dixons Carphone. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Dixons Carphone.
Diversification Opportunities for PennantPark Investment and Dixons Carphone
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PennantPark and Dixons is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Dixons Carphone plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dixons Carphone plc 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 Dixons Carphone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dixons Carphone plc has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Dixons Carphone go up and down completely randomly.
Pair Corralation between PennantPark Investment and Dixons Carphone
Given the investment horizon of 90 days PennantPark Investment is expected to generate 0.64 times more return on investment than Dixons Carphone. However, PennantPark Investment is 1.55 times less risky than Dixons Carphone. It trades about 0.0 of its potential returns per unit of risk. Dixons Carphone plc is currently generating about -0.04 per unit of risk. If you would invest 674.00 in PennantPark Investment on September 4, 2024 and sell it today you would lose (3.00) from holding PennantPark Investment or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
PennantPark Investment vs. Dixons Carphone plc
Performance |
| Timeline |
| PennantPark Investment |
| Dixons Carphone plc |
PennantPark Investment and Dixons Carphone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Dixons Carphone
The main advantage of trading using opposite PennantPark Investment and Dixons Carphone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Dixons Carphone 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 Dixons Carphone will offset losses from the drop in Dixons Carphone'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 |
| Dixons Carphone vs. RCS MediaGroup SpA | Dixons Carphone vs. Emerson Radio | Dixons Carphone vs. Cumulus Media Class | Dixons Carphone vs. PennantPark Investment |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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