Correlation Between PennantPark Investment and Otsuka
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Otsuka 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 Otsuka into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Otsuka, you can compare the effects of market volatilities on PennantPark Investment and Otsuka 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 Otsuka. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Otsuka.
Diversification Opportunities for PennantPark Investment and Otsuka
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and Otsuka is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Otsuka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otsuka 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 Otsuka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otsuka has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Otsuka go up and down completely randomly.
Pair Corralation between PennantPark Investment and Otsuka
If you would invest 656.00 in PennantPark Investment on September 5, 2024 and sell it today you would earn a total of 15.00 from holding PennantPark Investment or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
PennantPark Investment vs. Otsuka
Performance |
| Timeline |
| PennantPark Investment |
| Otsuka |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PennantPark Investment and Otsuka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Otsuka
The main advantage of trading using opposite PennantPark Investment and Otsuka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Otsuka 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 Otsuka will offset losses from the drop in Otsuka'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 |
| Otsuka vs. The Cheesecake Factory | Otsuka vs. BJs Restaurants | Otsuka vs. PennantPark Investment | Otsuka vs. Cannae Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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