Correlation Between FitLife Brands, and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both FitLife Brands, 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 FitLife Brands, and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FitLife Brands, Common and PennantPark Investment, you can compare the effects of market volatilities on FitLife Brands, 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 FitLife Brands, with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and PennantPark Investment.
Diversification Opportunities for FitLife Brands, and PennantPark Investment
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FitLife and PennantPark is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and FitLife Brands, 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 FitLife Brands, Common 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 FitLife Brands, i.e., FitLife Brands, and PennantPark Investment go up and down completely randomly.
Pair Corralation between FitLife Brands, and PennantPark Investment
Given the investment horizon of 90 days FitLife Brands, is expected to generate 50.8 times less return on investment than PennantPark Investment. In addition to that, FitLife Brands, is 2.6 times more volatile than PennantPark Investment. It trades about 0.0 of its total potential returns per unit of risk. PennantPark Investment is currently generating about 0.09 per unit of volatility. If you would invest 664.00 in PennantPark Investment on September 6, 2024 and sell it today you would earn a total of 14.00 from holding PennantPark Investment or generate 2.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FitLife Brands, Common vs. PennantPark Investment
Performance |
Timeline |
FitLife Brands, Common |
PennantPark Investment |
FitLife Brands, and PennantPark Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FitLife Brands, and PennantPark Investment
The main advantage of trading using opposite FitLife Brands, and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, 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.FitLife Brands, vs. Noble Romans | FitLife Brands, vs. Greystone Logistics | FitLife Brands, vs. Innovative Food Hldg | FitLife Brands, vs. Galaxy Gaming |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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