Correlation Between PennantPark Investment and Omni Health

Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Omni Health 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 Omni Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PennantPark Investment and Omni Health, you can compare the effects of market volatilities on PennantPark Investment and Omni Health 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 Omni Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Omni Health.

Diversification Opportunities for PennantPark Investment and Omni Health

0.0

Correlation Coefficient

PennantPark Investment  Omni Health

Pay attention - limited upside

The 3 months correlation between PennantPark and Omni is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Omni Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Health 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 Omni Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Health has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Omni Health go up and down completely randomly.

Pair Corralation between PennantPark Investment and Omni Health

If you would invest  679.00  in PennantPark Investment on October 12, 2024 and sell it today you would earn a total of  32.00  from holding PennantPark Investment or generate 4.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

PennantPark Investment  vs.  Omni Health

PennantPark Investment

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. 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.

Omni Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omni Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Omni Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PennantPark Investment and Omni Health

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

The idea behind PennantPark Investment and Omni Health 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.