Correlation Between MSAD INSURANCE and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both MSAD INSURANCE 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 MSAD INSURANCE and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSAD INSURANCE and PennantPark Investment, you can compare the effects of market volatilities on MSAD INSURANCE 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 MSAD INSURANCE with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSAD INSURANCE and PennantPark Investment.
Diversification Opportunities for MSAD INSURANCE and PennantPark Investment
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MSAD and PennantPark is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding MSAD INSURANCE and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and MSAD INSURANCE 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 MSAD INSURANCE 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 MSAD INSURANCE i.e., MSAD INSURANCE and PennantPark Investment go up and down completely randomly.
Pair Corralation between MSAD INSURANCE and PennantPark Investment
Assuming the 90 days trading horizon MSAD INSURANCE is expected to generate 0.67 times more return on investment than PennantPark Investment. However, MSAD INSURANCE is 1.5 times less risky than PennantPark Investment. It trades about 0.06 of its potential returns per unit of risk. PennantPark Investment is currently generating about 0.03 per unit of risk. If you would invest 2,070 in MSAD INSURANCE on December 29, 2024 and sell it today you would earn a total of 90.00 from holding MSAD INSURANCE or generate 4.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MSAD INSURANCE vs. PennantPark Investment
Performance |
Timeline |
MSAD INSURANCE |
PennantPark Investment |
MSAD INSURANCE and PennantPark Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MSAD INSURANCE and PennantPark Investment
The main advantage of trading using opposite MSAD INSURANCE and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSAD INSURANCE 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.MSAD INSURANCE vs. Media and Games | MSAD INSURANCE vs. Hochschild Mining plc | MSAD INSURANCE vs. APPLIED MATERIALS | MSAD INSURANCE vs. QINGCI GAMES INC |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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