Correlation Between AnaptysBio and PennyMac Finl
Can any of the company-specific risk be diversified away by investing in both AnaptysBio and PennyMac Finl 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 AnaptysBio and PennyMac Finl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AnaptysBio and PennyMac Finl Svcs, you can compare the effects of market volatilities on AnaptysBio and PennyMac Finl 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 AnaptysBio with a short position of PennyMac Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of AnaptysBio and PennyMac Finl.
Diversification Opportunities for AnaptysBio and PennyMac Finl
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AnaptysBio and PennyMac is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AnaptysBio and PennyMac Finl Svcs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Finl Svcs and AnaptysBio 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 AnaptysBio are associated (or correlated) with PennyMac Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennyMac Finl Svcs has no effect on the direction of AnaptysBio i.e., AnaptysBio and PennyMac Finl go up and down completely randomly.
Pair Corralation between AnaptysBio and PennyMac Finl
Given the investment horizon of 90 days AnaptysBio is expected to under-perform the PennyMac Finl. In addition to that, AnaptysBio is 6.03 times more volatile than PennyMac Finl Svcs. It trades about -0.32 of its total potential returns per unit of risk. PennyMac Finl Svcs is currently generating about -0.12 per unit of volatility. If you would invest 10,564 in PennyMac Finl Svcs on October 5, 2024 and sell it today you would lose (350.00) from holding PennyMac Finl Svcs or give up 3.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
AnaptysBio vs. PennyMac Finl Svcs
Performance |
Timeline |
AnaptysBio |
PennyMac Finl Svcs |
AnaptysBio and PennyMac Finl Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AnaptysBio and PennyMac Finl
The main advantage of trading using opposite AnaptysBio and PennyMac Finl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AnaptysBio position performs unexpectedly, PennyMac Finl 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 Finl will offset losses from the drop in PennyMac Finl's long position.AnaptysBio vs. Crinetics Pharmaceuticals | AnaptysBio vs. Rhythm Pharmaceuticals | AnaptysBio vs. Kura Oncology | AnaptysBio vs. CytomX Therapeutics |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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