Correlation Between PennantPark Investment and One Liberty
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and One Liberty 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 One Liberty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and One Liberty Properties, you can compare the effects of market volatilities on PennantPark Investment and One Liberty 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 One Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and One Liberty.
Diversification Opportunities for PennantPark Investment and One Liberty
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PennantPark and One is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty Properties 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 One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and One Liberty go up and down completely randomly.
Pair Corralation between PennantPark Investment and One Liberty
Given the investment horizon of 90 days PennantPark Investment is expected to generate 10.84 times less return on investment than One Liberty. But when comparing it to its historical volatility, PennantPark Investment is 1.22 times less risky than One Liberty. It trades about 0.02 of its potential returns per unit of risk. One Liberty Properties is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,700 in One Liberty Properties on August 27, 2024 and sell it today you would earn a total of 178.00 from holding One Liberty Properties or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. One Liberty Properties
Performance |
| Timeline |
| PennantPark Investment |
| One Liberty Properties |
PennantPark Investment and One Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and One Liberty
The main advantage of trading using opposite PennantPark Investment and One Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, One Liberty 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 One Liberty will offset losses from the drop in One Liberty'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 |
| One Liberty vs. Generationome Properties | One Liberty vs. Modiv Inc | One Liberty vs. Armada Hflr Pr | One Liberty vs. NexPoint Diversified Real |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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