Correlation Between Schweizer Electronic and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Schweizer Electronic and PennantPark Investment 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 Schweizer Electronic and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schweizer Electronic AG and PennantPark Investment, you can compare the effects of market volatilities on Schweizer Electronic and PennantPark Investment 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 Schweizer Electronic with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizer Electronic and PennantPark Investment.
Diversification Opportunities for Schweizer Electronic and PennantPark Investment
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Schweizer and PennantPark is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Schweizer Electronic AG and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Schweizer Electronic 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 Schweizer Electronic AG are associated (or correlated) with PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Schweizer Electronic i.e., Schweizer Electronic and PennantPark Investment go up and down completely randomly.
Pair Corralation between Schweizer Electronic and PennantPark Investment
Assuming the 90 days horizon Schweizer Electronic AG is expected to under-perform the PennantPark Investment. In addition to that, Schweizer Electronic is 1.84 times more volatile than PennantPark Investment. It trades about -0.02 of its total potential returns per unit of risk. PennantPark Investment is currently generating about 0.06 per unit of volatility. If you would invest 409.00 in PennantPark Investment on September 14, 2024 and sell it today you would earn a total of 243.00 from holding PennantPark Investment or generate 59.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Schweizer Electronic AG vs. PennantPark Investment
Performance |
Timeline |
Schweizer Electronic |
PennantPark Investment |
Schweizer Electronic and PennantPark Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Schweizer Electronic and PennantPark Investment
The main advantage of trading using opposite Schweizer Electronic and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizer Electronic position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.Schweizer Electronic vs. Benchmark Electronics | Schweizer Electronic vs. Superior Plus Corp | Schweizer Electronic vs. SIVERS SEMICONDUCTORS AB | Schweizer Electronic vs. Norsk Hydro ASA |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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