Correlation Between Pengana Private and Challenger

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

By analyzing existing cross correlation between Pengana Private Equity and Challenger, you can compare the effects of market volatilities on Pengana Private and Challenger 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 Pengana Private with a short position of Challenger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pengana Private and Challenger.

Diversification Opportunities for Pengana Private and Challenger

0.37

Correlation Coefficient

Pengana Private  Challenger

Weak diversification

The 3 months correlation between Pengana and Challenger is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pengana Private Equity and Challenger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Challenger and Pengana Private 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 Pengana Private Equity are associated (or correlated) with Challenger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Challenger has no effect on the direction of Pengana Private i.e., Pengana Private and Challenger go up and down completely randomly.

Pair Corralation between Pengana Private and Challenger

Assuming the 90 days trading horizon Pengana Private Equity is expected to under-perform the Challenger. In addition to that, Pengana Private is 1.2 times more volatile than Challenger. It trades about -0.01 of its total potential returns per unit of risk. Challenger is currently generating about 0.01 per unit of volatility. If you would invest  623.00  in Challenger on September 5, 2024 and sell it today you would earn a total of  3.00  from holding Challenger or generate 0.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pengana Private Equity  vs.  Challenger

Pengana Private Equity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Challenger

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Challenger has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Challenger 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 Pengana Private and Challenger

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

The idea behind Pengana Private Equity and Challenger 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.