Correlation Between PennantPark Investment and Comstock Holding
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Comstock Holding 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 PennantPark Investment and Comstock Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Comstock Holding Companies, you can compare the effects of market volatilities on PennantPark Investment and Comstock Holding 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 PennantPark Investment with a short position of Comstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Comstock Holding.
Diversification Opportunities for PennantPark Investment and Comstock Holding
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PennantPark and Comstock is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Comstock Holding Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Holding Com and PennantPark Investment 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 PennantPark Investment are associated (or correlated) with Comstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Holding Com has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Comstock Holding go up and down completely randomly.
Pair Corralation between PennantPark Investment and Comstock Holding
Given the investment horizon of 90 days PennantPark Investment is expected to generate 16.08 times less return on investment than Comstock Holding. But when comparing it to its historical volatility, PennantPark Investment is 4.7 times less risky than Comstock Holding. It trades about 0.03 of its potential returns per unit of risk. Comstock Holding Companies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 757.00 in Comstock Holding Companies on September 6, 2024 and sell it today you would earn a total of 162.00 from holding Comstock Holding Companies or generate 21.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PennantPark Investment vs. Comstock Holding Companies
Performance |
Timeline |
PennantPark Investment |
Comstock Holding Com |
PennantPark Investment and Comstock Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PennantPark Investment and Comstock Holding
The main advantage of trading using opposite PennantPark Investment and Comstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Comstock Holding 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 Comstock Holding will offset losses from the drop in Comstock Holding's long position.PennantPark Investment vs. Sixth Street Specialty | PennantPark Investment vs. New Mountain Finance | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. BlackRock TCP Capital |
Comstock Holding vs. St Joe Company | Comstock Holding vs. Stratus Properties | Comstock Holding vs. Mitsui Fudosan Co | Comstock Holding vs. New World Development |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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