Correlation Between Staatl Mineralbrunnen and PennantPark Investment

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

By analyzing existing cross correlation between Staatl Mineralbrunnen AG and PennantPark Investment, you can compare the effects of market volatilities on Staatl Mineralbrunnen 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 Staatl Mineralbrunnen with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Staatl Mineralbrunnen and PennantPark Investment.

Diversification Opportunities for Staatl Mineralbrunnen and PennantPark Investment

0.0

Correlation Coefficient

Staatl Mineralbrunnen  PennantPark Investment

Pay attention - limited upside

The 3 months correlation between Staatl and PennantPark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Staatl Mineralbrunnen AG and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Staatl Mineralbrunnen 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 Staatl Mineralbrunnen 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 Staatl Mineralbrunnen i.e., Staatl Mineralbrunnen and PennantPark Investment go up and down completely randomly.

Pair Corralation between Staatl Mineralbrunnen and PennantPark Investment

If you would invest  653.00  in PennantPark Investment on September 25, 2024 and sell it today you would lose (1.00) from holding PennantPark Investment or give up 0.15% of portfolio value over 90 days.

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

Staatl Mineralbrunnen AG  vs.  PennantPark Investment

Staatl Mineralbrunnen

Risk-Adjusted Performance

0 of 100

Very Weak

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

PennantPark Investment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Investment are ranked lower than 7 (%) 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.

Pair Trading with Staatl Mineralbrunnen and PennantPark Investment

The main advantage of trading using opposite Staatl Mineralbrunnen and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Staatl Mineralbrunnen 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.

The idea behind Staatl Mineralbrunnen AG and PennantPark Investment 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.