Correlation Between PennantPark Investment and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Haverty Furniture 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 Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Haverty Furniture Companies, you can compare the effects of market volatilities on PennantPark Investment and Haverty Furniture 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 Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Haverty Furniture.
Diversification Opportunities for PennantPark Investment and Haverty Furniture
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PennantPark and Haverty is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture 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 Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Haverty Furniture go up and down completely randomly.
Pair Corralation between PennantPark Investment and Haverty Furniture
Assuming the 90 days horizon PennantPark Investment is expected to generate 0.69 times more return on investment than Haverty Furniture. However, PennantPark Investment is 1.44 times less risky than Haverty Furniture. It trades about 0.04 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about -0.06 per unit of risk. If you would invest 641.00 in PennantPark Investment on December 29, 2024 and sell it today you would earn a total of 21.00 from holding PennantPark Investment or generate 3.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PennantPark Investment vs. Haverty Furniture Companies
Performance |
Timeline |
PennantPark Investment |
Haverty Furniture |
PennantPark Investment and Haverty Furniture Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PennantPark Investment and Haverty Furniture
The main advantage of trading using opposite PennantPark Investment and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Haverty Furniture 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 Haverty Furniture will offset losses from the drop in Haverty Furniture's long position.PennantPark Investment vs. Blackstone Group | PennantPark Investment vs. The Bank of | PennantPark Investment vs. Ameriprise Financial | PennantPark Investment vs. EQT AB |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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