Correlation Between PennantPark Investment and Kandi Technologies

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Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Kandi Technologies 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 Kandi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Kandi Technologies Group, you can compare the effects of market volatilities on PennantPark Investment and Kandi Technologies 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 Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Kandi Technologies.

Diversification Opportunities for PennantPark Investment and Kandi Technologies

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between PennantPark and Kandi is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies 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 Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Kandi Technologies go up and down completely randomly.

Pair Corralation between PennantPark Investment and Kandi Technologies

Given the investment horizon of 90 days PennantPark Investment is expected to generate 0.21 times more return on investment than Kandi Technologies. However, PennantPark Investment is 4.67 times less risky than Kandi Technologies. It trades about 0.01 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.09 per unit of risk. If you would invest  676.00  in PennantPark Investment on September 3, 2024 and sell it today you would earn a total of  1.00  from holding PennantPark Investment or generate 0.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

PennantPark Investment  vs.  Kandi Technologies Group

 Performance 
       Timeline  
PennantPark Investment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PennantPark Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PennantPark Investment is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
Kandi Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kandi Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

PennantPark Investment and Kandi Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PennantPark Investment and Kandi Technologies

The main advantage of trading using opposite PennantPark Investment and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Kandi Technologies 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 Kandi Technologies will offset losses from the drop in Kandi Technologies' long position.
The idea behind PennantPark Investment and Kandi Technologies Group 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.
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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