Correlation Between Pennant and Cytosorbents Crp

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

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

Diversification Opportunities for Pennant and Cytosorbents Crp

-0.67

Correlation Coefficient

Pennant  Cytosorbents Crp

Excellent diversification

The 3 months correlation between Pennant and Cytosorbents is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pennant Group and Cytosorbents Crp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytosorbents Crp and Pennant 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 Pennant Group are associated (or correlated) with Cytosorbents Crp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytosorbents Crp has no effect on the direction of Pennant i.e., Pennant and Cytosorbents Crp go up and down completely randomly.

Pair Corralation between Pennant and Cytosorbents Crp

Given the investment horizon of 90 days Pennant Group is expected to generate 0.4 times more return on investment than Cytosorbents Crp. However, Pennant Group is 2.51 times less risky than Cytosorbents Crp. It trades about 0.11 of its potential returns per unit of risk. Cytosorbents Crp is currently generating about -0.11 per unit of risk. If you would invest  2,011  in Pennant Group on January 31, 2024 and sell it today you would earn a total of  80.00  from holding Pennant Group or generate 3.98% return on investment over 90 days.

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

Pennant Group  vs.  Cytosorbents Crp

Pennant Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pennant Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Pennant reported solid returns over the last few months and may actually be approaching a breakup point.

Cytosorbents Crp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytosorbents Crp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Pennant and Cytosorbents Crp

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

The idea behind Pennant Group and Cytosorbents Crp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.