Correlation Between PennantPark Investment and Marie Brizard

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

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

Diversification Opportunities for PennantPark Investment and Marie Brizard

-0.03

Correlation Coefficient

PennantPark Investment  Marie Brizard

Good diversification

The 3 months correlation between PennantPark and Marie is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Marie Brizard Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marie Brizard Wine 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 Marie Brizard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marie Brizard Wine has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Marie Brizard go up and down completely randomly.

Pair Corralation between PennantPark Investment and Marie Brizard

Assuming the 90 days horizon PennantPark Investment is expected to generate 1.02 times more return on investment than Marie Brizard. However, PennantPark Investment is 1.02 times more volatile than Marie Brizard Wine. It trades about 0.04 of its potential returns per unit of risk. Marie Brizard Wine is currently generating about -0.02 per unit of risk. If you would invest  610.00  in PennantPark Investment on September 3, 2024 and sell it today you would earn a total of  22.00  from holding PennantPark Investment or generate 3.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PennantPark Investment  vs.  Marie Brizard Wine

PennantPark Investment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, PennantPark Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Marie Brizard Wine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marie Brizard Wine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Marie Brizard is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PennantPark Investment and Marie Brizard

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

The idea behind PennantPark Investment and Marie Brizard Wine 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.