Correlation Between Avient Corp and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Avient Corp 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 Avient Corp and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and PennantPark Floating Rate, you can compare the effects of market volatilities on Avient Corp 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 Avient Corp with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and PennantPark Floating.
Diversification Opportunities for Avient Corp and PennantPark Floating
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Avient and PennantPark is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp 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 Avient Corp 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 Avient Corp 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 Avient Corp i.e., Avient Corp and PennantPark Floating go up and down completely randomly.
Pair Corralation between Avient Corp and PennantPark Floating
Given the investment horizon of 90 days Avient Corp is expected to generate 1.48 times more return on investment than PennantPark Floating. However, Avient Corp is 1.48 times more volatile than PennantPark Floating Rate. It trades about 0.06 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.04 per unit of risk. If you would invest 3,259 in Avient Corp on August 30, 2024 and sell it today you would earn a total of 1,869 from holding Avient Corp or generate 57.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avient Corp vs. PennantPark Floating Rate
Performance |
| Timeline |
| Avient Corp |
| PennantPark Floating Rate |
Avient Corp and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and PennantPark Floating
The main advantage of trading using opposite Avient Corp and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp 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.| Avient Corp vs. Direxion Daily FTSE | Avient Corp vs. Collegium Pharmaceutical | Avient Corp vs. KKR Co LP | Avient Corp vs. iShares Dividend and |
| PennantPark Floating vs. TPG Inc | PennantPark Floating vs. Carlyle Secured Lending | PennantPark Floating vs. Brookfield Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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