Correlation Between Via Renewables and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Via Renewables and PennantPark Investment 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 Via Renewables and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Via Renewables and PennantPark Investment, you can compare the effects of market volatilities on Via Renewables and PennantPark Investment 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 Via Renewables with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Renewables and PennantPark Investment.
Diversification Opportunities for Via Renewables and PennantPark Investment
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Via and PennantPark is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Via Renewables 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 Via Renewables are associated (or correlated) with PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Via Renewables i.e., Via Renewables and PennantPark Investment go up and down completely randomly.
Pair Corralation between Via Renewables and PennantPark Investment
Assuming the 90 days horizon Via Renewables is expected to generate 0.7 times more return on investment than PennantPark Investment. However, Via Renewables is 1.43 times less risky than PennantPark Investment. It trades about 0.37 of its potential returns per unit of risk. PennantPark Investment is currently generating about 0.1 per unit of risk. If you would invest 2,212 in Via Renewables on September 26, 2024 and sell it today you would earn a total of 128.00 from holding Via Renewables or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Via Renewables vs. PennantPark Investment
Performance |
| Timeline |
| Via Renewables |
| PennantPark Investment |
Via Renewables and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Via Renewables and PennantPark Investment
The main advantage of trading using opposite Via Renewables and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
| PennantPark Investment vs. Sixth Street Specialty | PennantPark Investment vs. New Mountain Finance | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. BlackRock TCP Capital |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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