Correlation Between PennantPark Investment and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and USWE SPORTS 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 USWE SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and USWE SPORTS AB, you can compare the effects of market volatilities on PennantPark Investment and USWE SPORTS 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 USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and USWE SPORTS.
Diversification Opportunities for PennantPark Investment and USWE SPORTS
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PennantPark and USWE is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB 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 USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and USWE SPORTS go up and down completely randomly.
Pair Corralation between PennantPark Investment and USWE SPORTS
Assuming the 90 days horizon PennantPark Investment is expected to generate 2.56 times less return on investment than USWE SPORTS. But when comparing it to its historical volatility, PennantPark Investment is 1.77 times less risky than USWE SPORTS. It trades about 0.09 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 57.00 in USWE SPORTS AB on September 25, 2024 and sell it today you would earn a total of 16.00 from holding USWE SPORTS AB or generate 28.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PennantPark Investment vs. USWE SPORTS AB
Performance |
Timeline |
PennantPark Investment |
USWE SPORTS AB |
PennantPark Investment and USWE SPORTS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PennantPark Investment and USWE SPORTS
The main advantage of trading using opposite PennantPark Investment and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.PennantPark Investment vs. ANGLER GAMING PLC | PennantPark Investment vs. Aozora Bank | PennantPark Investment vs. CI GAMES SA | PennantPark Investment vs. Solstad Offshore ASA |
USWE SPORTS vs. Booking Holdings | USWE SPORTS vs. ANTA Sports Products | USWE SPORTS vs. Li Ning Company | USWE SPORTS vs. Royal Caribbean Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |