Correlation Between PennantPark Investment and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Marfrig Global 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 Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Marfrig Global Foods, you can compare the effects of market volatilities on PennantPark Investment and Marfrig Global 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 Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Marfrig Global.
Diversification Opportunities for PennantPark Investment and Marfrig Global
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and Marfrig is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Marfrig Global Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfrig Global Foods 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 Marfrig Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfrig Global Foods has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Marfrig Global go up and down completely randomly.
Pair Corralation between PennantPark Investment and Marfrig Global
Given the investment horizon of 90 days PennantPark Investment is expected to generate 478.1 times less return on investment than Marfrig Global. But when comparing it to its historical volatility, PennantPark Investment is 2.46 times less risky than Marfrig Global. It trades about 0.0 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 255.00 in Marfrig Global Foods on August 28, 2024 and sell it today you would earn a total of 53.00 from holding Marfrig Global Foods or generate 20.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Marfrig Global Foods
Performance |
| Timeline |
| PennantPark Investment |
| Marfrig Global Foods |
PennantPark Investment and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Marfrig Global
The main advantage of trading using opposite PennantPark Investment and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Marfrig Global 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 Marfrig Global will offset losses from the drop in Marfrig Global'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 |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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