Correlation Between PennantPark Investment and MCEWEN MINING

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

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

Diversification Opportunities for PennantPark Investment and MCEWEN MINING

-0.11

Correlation Coefficient

PennantPark Investment  MCEWEN MINING

Good diversification

The 3 months correlation between PennantPark and MCEWEN is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC 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 MCEWEN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCEWEN MINING INC has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and MCEWEN MINING go up and down completely randomly.

Pair Corralation between PennantPark Investment and MCEWEN MINING

Assuming the 90 days horizon PennantPark Investment is expected to under-perform the MCEWEN MINING. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Investment is 2.02 times less risky than MCEWEN MINING. The stock trades about -0.05 of its potential returns per unit of risk. The MCEWEN MINING INC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  795.00  in MCEWEN MINING INC on September 13, 2024 and sell it today you would earn a total of  20.00  from holding MCEWEN MINING INC or generate 2.52% 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.  MCEWEN MINING INC

PennantPark Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PennantPark Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MCEWEN MINING INC

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days MCEWEN MINING INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MCEWEN MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PennantPark Investment and MCEWEN MINING

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

The idea behind PennantPark Investment and MCEWEN MINING INC 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.