Correlation Between PennantPark Investment and National CineMedia
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and National CineMedia 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 National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and National CineMedia, you can compare the effects of market volatilities on PennantPark Investment and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and National CineMedia.
Diversification Opportunities for PennantPark Investment and National CineMedia
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and National is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and National CineMedia go up and down completely randomly.
Pair Corralation between PennantPark Investment and National CineMedia
Given the investment horizon of 90 days PennantPark Investment is expected to generate 0.47 times more return on investment than National CineMedia. However, PennantPark Investment is 2.15 times less risky than National CineMedia. It trades about -0.03 of its potential returns per unit of risk. National CineMedia is currently generating about -0.04 per unit of risk. If you would invest 685.00 in PennantPark Investment on September 1, 2024 and sell it today you would lose (8.00) from holding PennantPark Investment or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. National CineMedia
Performance |
| Timeline |
| PennantPark Investment |
| National CineMedia |
PennantPark Investment and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and National CineMedia
The main advantage of trading using opposite PennantPark Investment and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia'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 |
| National CineMedia vs. Mirriad Advertising plc | National CineMedia vs. INEO Tech Corp | National CineMedia vs. Kidoz Inc | National CineMedia vs. Marchex |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |