Correlation Between Cyclo Therapeutics and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Cyclo Therapeutics 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 Cyclo Therapeutics and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cyclo Therapeutics and PennantPark Floating Rate, you can compare the effects of market volatilities on Cyclo Therapeutics 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 Cyclo Therapeutics with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyclo Therapeutics and PennantPark Floating.
Diversification Opportunities for Cyclo Therapeutics and PennantPark Floating
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cyclo and PennantPark is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cyclo Therapeutics 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 Cyclo Therapeutics 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 Cyclo Therapeutics 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 Cyclo Therapeutics i.e., Cyclo Therapeutics and PennantPark Floating go up and down completely randomly.
Pair Corralation between Cyclo Therapeutics and PennantPark Floating
Assuming the 90 days horizon Cyclo Therapeutics is expected to generate 22.72 times more return on investment than PennantPark Floating. However, Cyclo Therapeutics is 22.72 times more volatile than PennantPark Floating Rate. It trades about 0.36 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.16 per unit of risk. If you would invest 9.10 in Cyclo Therapeutics on November 3, 2024 and sell it today you would earn a total of 20.90 from holding Cyclo Therapeutics or generate 229.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cyclo Therapeutics vs. PennantPark Floating Rate
Performance |
| Timeline |
| Cyclo Therapeutics |
| PennantPark Floating Rate |
Cyclo Therapeutics and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cyclo Therapeutics and PennantPark Floating
The main advantage of trading using opposite Cyclo Therapeutics and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyclo Therapeutics 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.| Cyclo Therapeutics vs. Garmin | Cyclo Therapeutics vs. Integrated Media Technology | Cyclo Therapeutics vs. Jabil Circuit | Cyclo Therapeutics vs. Church Dwight |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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