Correlation Between Nucletron Electronic and PennyMac Financial

Can any of the company-specific risk be diversified away by investing in both Nucletron Electronic 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 Nucletron Electronic and PennyMac Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nucletron Electronic Aktiengesellschaft and PennyMac Financial Services, you can compare the effects of market volatilities on Nucletron Electronic 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 Nucletron Electronic with a short position of PennyMac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nucletron Electronic and PennyMac Financial.

Diversification Opportunities for Nucletron Electronic and PennyMac Financial

0.0

Correlation Coefficient

Nucletron Electronic  PennyMac Financial

Pay attention - limited upside

The 3 months correlation between Nucletron and PennyMac is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nucletron Electronic Aktienges and PennyMac Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennyMac Financial and Nucletron Electronic 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 Nucletron Electronic Aktiengesellschaft 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 Nucletron Electronic i.e., Nucletron Electronic and PennyMac Financial go up and down completely randomly.

Pair Corralation between Nucletron Electronic and PennyMac Financial

If you would invest  8,871  in PennyMac Financial Services on September 21, 2024 and sell it today you would earn a total of  879.00  from holding PennyMac Financial Services or generate 9.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.85%
Values	Daily Returns

Nucletron Electronic Aktienges  vs.  PennyMac Financial Services

Nucletron Electronic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nucletron Electronic Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nucletron Electronic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PennyMac Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PennyMac Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PennyMac Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nucletron Electronic and PennyMac Financial

The main advantage of trading using opposite Nucletron Electronic and PennyMac Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nucletron Electronic 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.

The idea behind Nucletron Electronic Aktiengesellschaft and PennyMac Financial Services pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.