Correlation Between PKSHA TECHNOLOGY and PennyMac Financial
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and PennyMac Financial 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 PKSHA TECHNOLOGY and PennyMac Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PKSHA TECHNOLOGY INC and PennyMac Financial Services, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and PennyMac Financial 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 PKSHA TECHNOLOGY with a short position of PennyMac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and PennyMac Financial.
Diversification Opportunities for PKSHA TECHNOLOGY and PennyMac Financial
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PKSHA and PennyMac is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and PennyMac Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Financial and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC are associated (or correlated) with PennyMac Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennyMac Financial has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and PennyMac Financial go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and PennyMac Financial
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 2.27 times more return on investment than PennyMac Financial. However, PKSHA TECHNOLOGY is 2.27 times more volatile than PennyMac Financial Services. It trades about 0.03 of its potential returns per unit of risk. PennyMac Financial Services is currently generating about 0.05 per unit of risk. If you would invest 2,100 in PKSHA TECHNOLOGY INC on October 9, 2024 and sell it today you would earn a total of 260.00 from holding PKSHA TECHNOLOGY INC or generate 12.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. PennyMac Financial Services
Performance |
Timeline |
PKSHA TECHNOLOGY INC |
PennyMac Financial |
PKSHA TECHNOLOGY and PennyMac Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PKSHA TECHNOLOGY and PennyMac Financial
The main advantage of trading using opposite PKSHA TECHNOLOGY and PennyMac Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, PennyMac Financial 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 PennyMac Financial will offset losses from the drop in PennyMac Financial's long position.PKSHA TECHNOLOGY vs. Performance Food Group | PKSHA TECHNOLOGY vs. EBRO FOODS | PKSHA TECHNOLOGY vs. MAGNUM MINING EXP | PKSHA TECHNOLOGY vs. Forsys Metals Corp |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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