Correlation Between PennantPark Investment and Old Republic
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Old Republic 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 Old Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Old Republic International, you can compare the effects of market volatilities on PennantPark Investment and Old Republic 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 Old Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Old Republic.
Diversification Opportunities for PennantPark Investment and Old Republic
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PennantPark and Old is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Old Republic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Republic Interna 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 Old Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Republic Interna has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Old Republic go up and down completely randomly.
Pair Corralation between PennantPark Investment and Old Republic
Given the investment horizon of 90 days PennantPark Investment is expected to generate 1.09 times less return on investment than Old Republic. In addition to that, PennantPark Investment is 1.09 times more volatile than Old Republic International. It trades about 0.08 of its total potential returns per unit of risk. Old Republic International is currently generating about 0.09 per unit of volatility. If you would invest 2,476 in Old Republic International on August 27, 2024 and sell it today you would earn a total of 1,384 from holding Old Republic International or generate 55.9% 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. Old Republic International
Performance |
| Timeline |
| PennantPark Investment |
| Old Republic Interna |
PennantPark Investment and Old Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Old Republic
The main advantage of trading using opposite PennantPark Investment and Old Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Old Republic 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 Old Republic will offset losses from the drop in Old Republic'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 |
| Old Republic vs. Fiverr International | Old Republic vs. Pinterest | Old Republic vs. Upstart Holdings | Old Republic vs. Fastly Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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