Correlation Between Associated Capital and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Associated Capital and PennantPark Floating 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 Associated Capital and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and PennantPark Floating Rate, you can compare the effects of market volatilities on Associated Capital and PennantPark Floating 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 Associated Capital with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and PennantPark Floating.
Diversification Opportunities for Associated Capital and PennantPark Floating
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Associated and PennantPark is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate and Associated Capital 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 Associated Capital Group are associated (or correlated) with PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of Associated Capital i.e., Associated Capital and PennantPark Floating go up and down completely randomly.
Pair Corralation between Associated Capital and PennantPark Floating
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 1.07 times less return on investment than PennantPark Floating. In addition to that, Associated Capital is 2.32 times more volatile than PennantPark Floating Rate. It trades about 0.08 of its total potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.2 per unit of volatility. If you would invest 1,090 in PennantPark Floating Rate on September 3, 2024 and sell it today you would earn a total of 26.00 from holding PennantPark Floating Rate or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. PennantPark Floating Rate
Performance |
| Timeline |
| Associated Capital |
| PennantPark Floating Rate |
Associated Capital and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and PennantPark Floating
The main advantage of trading using opposite Associated Capital and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, PennantPark Floating 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 Floating will offset losses from the drop in PennantPark Floating's long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| PennantPark Floating vs. Federated Premier Municipal | PennantPark Floating vs. Blackrock Muniyield | PennantPark Floating vs. Federated Investors B | PennantPark Floating vs. SEI Investments |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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