Correlation Between Brookfield Corp and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Brookfield 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 Brookfield 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 Brookfield Corp and PennantPark Floating Rate, you can compare the effects of market volatilities on Brookfield 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 Brookfield Corp with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Corp and PennantPark Floating.
Diversification Opportunities for Brookfield Corp and PennantPark Floating
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brookfield and PennantPark is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield 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 Brookfield 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 Brookfield 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 Brookfield Corp i.e., Brookfield Corp and PennantPark Floating go up and down completely randomly.
Pair Corralation between Brookfield Corp and PennantPark Floating
Allowing for the 90-day total investment horizon Brookfield Corp is expected to under-perform the PennantPark Floating. In addition to that, Brookfield Corp is 1.23 times more volatile than PennantPark Floating Rate. It trades about -0.06 of its total potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.05 per unit of volatility. If you would invest 1,120 in PennantPark Floating Rate on November 27, 2024 and sell it today you would earn a total of 13.00 from holding PennantPark Floating Rate or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Corp vs. PennantPark Floating Rate
Performance |
| Timeline |
| Brookfield Corp |
| PennantPark Floating Rate |
Brookfield Corp and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Corp and PennantPark Floating
The main advantage of trading using opposite Brookfield Corp and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield 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.| Brookfield Corp vs. KKR Co LP | Brookfield Corp vs. Blackstone Group | Brookfield Corp vs. T Rowe Price | Brookfield Corp vs. Apollo Global Management |
| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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