Correlation Between PennantPark Investment and Keurig Dr

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

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

Diversification Opportunities for PennantPark Investment and Keurig Dr

-0.33

Correlation Coefficient

PennantPark Investment  Keurig Dr

Very good diversification

The 3 months correlation between PennantPark and Keurig is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper 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 Keurig Dr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Keurig Dr go up and down completely randomly.

Pair Corralation between PennantPark Investment and Keurig Dr

Given the investment horizon of 90 days PennantPark Investment is expected to generate 0.91 times more return on investment than Keurig Dr. However, PennantPark Investment is 1.1 times less risky than Keurig Dr. It trades about 0.25 of its potential returns per unit of risk. Keurig Dr Pepper is currently generating about -0.05 per unit of risk. If you would invest  669.00  in PennantPark Investment on September 29, 2024 and sell it today you would earn a total of  30.00  from holding PennantPark Investment or generate 4.48% 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.  Keurig Dr Pepper

PennantPark Investment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, PennantPark Investment is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Keurig Dr Pepper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keurig Dr Pepper has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with PennantPark Investment and Keurig Dr

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

The idea behind PennantPark Investment and Keurig Dr Pepper 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.