Correlation Between 3i Group and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both 3i Group and PennantPark Investment 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 3i Group and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3i Group PLC and PennantPark Investment, you can compare the effects of market volatilities on 3i Group and PennantPark Investment 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 3i Group with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3i Group and PennantPark Investment.
Diversification Opportunities for 3i Group and PennantPark Investment
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TGOPY and PennantPark is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding 3i Group PLC and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and 3i Group 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 3i Group PLC are associated (or correlated) with PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of 3i Group i.e., 3i Group and PennantPark Investment go up and down completely randomly.
Pair Corralation between 3i Group and PennantPark Investment
Assuming the 90 days horizon 3i Group PLC is expected to generate 1.62 times more return on investment than PennantPark Investment. However, 3i Group is 1.62 times more volatile than PennantPark Investment. It trades about 0.12 of its potential returns per unit of risk. PennantPark Investment is currently generating about 0.03 per unit of risk. If you would invest 2,087 in 3i Group PLC on September 13, 2024 and sell it today you would earn a total of 263.00 from holding 3i Group PLC or generate 12.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
3i Group PLC vs. PennantPark Investment
Performance |
Timeline |
3i Group PLC |
PennantPark Investment |
3i Group and PennantPark Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 3i Group and PennantPark Investment
The main advantage of trading using opposite 3i Group and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3i Group position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.3i Group vs. Nuveen Global High | 3i Group vs. New America High | 3i Group vs. Brookfield Business Corp | 3i Group vs. Elysee Development Corp |
PennantPark Investment vs. Visa Class A | PennantPark Investment vs. Diamond Hill Investment | PennantPark Investment vs. Distoken Acquisition | PennantPark Investment vs. AllianceBernstein Holding LP |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |