Correlation Between PennyMac Finl and Uniqure NV

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

By analyzing existing cross correlation between PennyMac Finl Svcs and Uniqure NV, you can compare the effects of market volatilities on PennyMac Finl and Uniqure NV 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 Finl with a short position of Uniqure NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Finl and Uniqure NV.

Diversification Opportunities for PennyMac Finl and Uniqure NV

-0.37

Correlation Coefficient

PennyMac Finl  Uniqure NV

Very good diversification

The 3 months correlation between PennyMac and Uniqure is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Finl Svcs and Uniqure NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniqure NV and PennyMac Finl 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 Finl Svcs are associated (or correlated) with Uniqure NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniqure NV has no effect on the direction of PennyMac Finl i.e., PennyMac Finl and Uniqure NV go up and down completely randomly.

Pair Corralation between PennyMac Finl and Uniqure NV

Given the investment horizon of 90 days PennyMac Finl is expected to generate 1.62 times less return on investment than Uniqure NV. But when comparing it to its historical volatility, PennyMac Finl Svcs is 4.06 times less risky than Uniqure NV. It trades about 0.06 of its potential returns per unit of risk. Uniqure NV is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,252  in Uniqure NV on October 5, 2024 and sell it today you would lose (486.00) from holding Uniqure NV or give up 21.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PennyMac Finl Svcs  vs.  Uniqure NV

PennyMac Finl Svcs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PennyMac Finl Svcs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, PennyMac Finl is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Uniqure NV

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Uniqure NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Uniqure NV exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PennyMac Finl and Uniqure NV

The main advantage of trading using opposite PennyMac Finl and Uniqure NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Finl position performs unexpectedly, Uniqure NV 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 Uniqure NV will offset losses from the drop in Uniqure NV's long position.

The idea behind PennyMac Finl Svcs and Uniqure NV 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.