Correlation Between PennyMac Mortgage and Scottish Mortgage
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage and Scottish Mortgage 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 PennyMac Mortgage and Scottish Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennyMac Mortgage Investment and Scottish Mortgage Investment, you can compare the effects of market volatilities on PennyMac Mortgage and Scottish Mortgage 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 PennyMac Mortgage with a short position of Scottish Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and Scottish Mortgage.
Diversification Opportunities for PennyMac Mortgage and Scottish Mortgage
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennyMac and Scottish is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and Scottish Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottish Mortgage and PennyMac Mortgage 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 PennyMac Mortgage Investment are associated (or correlated) with Scottish Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottish Mortgage has no effect on the direction of PennyMac Mortgage i.e., PennyMac Mortgage and Scottish Mortgage go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and Scottish Mortgage
Assuming the 90 days horizon PennyMac Mortgage Investment is expected to generate 0.78 times more return on investment than Scottish Mortgage. However, PennyMac Mortgage Investment is 1.28 times less risky than Scottish Mortgage. It trades about 0.15 of its potential returns per unit of risk. Scottish Mortgage Investment is currently generating about 0.01 per unit of risk. If you would invest 1,189 in PennyMac Mortgage Investment on December 22, 2024 and sell it today you would earn a total of 151.00 from holding PennyMac Mortgage Investment or generate 12.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PennyMac Mortgage Investment vs. Scottish Mortgage Investment
Performance |
Timeline |
PennyMac Mortgage |
Scottish Mortgage |
PennyMac Mortgage and Scottish Mortgage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PennyMac Mortgage and Scottish Mortgage
The main advantage of trading using opposite PennyMac Mortgage and Scottish Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage position performs unexpectedly, Scottish Mortgage 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 Scottish Mortgage will offset losses from the drop in Scottish Mortgage's long position.PennyMac Mortgage vs. GEAR4MUSIC LS 10 | PennyMac Mortgage vs. MOVIE GAMES SA | PennyMac Mortgage vs. Warner Music Group | PennyMac Mortgage vs. YATRA ONLINE DL 0001 |
Scottish Mortgage vs. REGAL ASIAN INVESTMENTS | Scottish Mortgage vs. DATALOGIC | Scottish Mortgage vs. MICRONIC MYDATA | Scottish Mortgage vs. Public Storage |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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