Correlation Between PennantPark Investment and Altia Oyj

Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Altia Oyj 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 Altia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PennantPark Investment and Altia Oyj, you can compare the effects of market volatilities on PennantPark Investment and Altia Oyj 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 Altia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Altia Oyj.

Diversification Opportunities for PennantPark Investment and Altia Oyj

0.0

Correlation Coefficient

PennantPark Investment  Altia Oyj

Pay attention - limited upside

The 3 months correlation between PennantPark and Altia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Altia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altia Oyj 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 Altia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altia Oyj has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Altia Oyj go up and down completely randomly.

Pair Corralation between PennantPark Investment and Altia Oyj

If you would invest  660.00  in PennantPark Investment on October 4, 2024 and sell it today you would earn a total of  3.00  from holding PennantPark Investment or generate 0.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.81%
Values	Daily Returns

PennantPark Investment  vs.  Altia Oyj

PennantPark Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PennantPark Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Altia Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altia Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Altia Oyj is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PennantPark Investment and Altia Oyj

The main advantage of trading using opposite PennantPark Investment and Altia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Altia Oyj 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 Altia Oyj will offset losses from the drop in Altia Oyj's long position.

The idea behind PennantPark Investment and Altia Oyj pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.