Correlation Between PennantPark Investment and Onxeo SA
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Onxeo SA 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 Onxeo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Onxeo SA, you can compare the effects of market volatilities on PennantPark Investment and Onxeo SA 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 Onxeo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Onxeo SA.
Diversification Opportunities for PennantPark Investment and Onxeo SA
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and Onxeo is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Onxeo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onxeo SA 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 Onxeo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onxeo SA has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Onxeo SA go up and down completely randomly.
Pair Corralation between PennantPark Investment and Onxeo SA
Assuming the 90 days horizon PennantPark Investment is expected to generate 6.46 times less return on investment than Onxeo SA. But when comparing it to its historical volatility, PennantPark Investment is 5.23 times less risky than Onxeo SA. It trades about 0.02 of its potential returns per unit of risk. Onxeo SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Onxeo SA on September 25, 2024 and sell it today you would lose (2.17) from holding Onxeo SA or give up 21.7% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.22% |
Values | Daily Returns |
PennantPark Investment vs. Onxeo SA
Performance |
Timeline |
PennantPark Investment |
Onxeo SA |
PennantPark Investment and Onxeo SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PennantPark Investment and Onxeo SA
The main advantage of trading using opposite PennantPark Investment and Onxeo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Onxeo SA 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 Onxeo SA will offset losses from the drop in Onxeo SA's long position.PennantPark Investment vs. ANGLER GAMING PLC | PennantPark Investment vs. Aozora Bank | PennantPark Investment vs. CI GAMES SA | PennantPark Investment vs. Solstad Offshore ASA |
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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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