Correlation Between Flexible Solutions and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions 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 Flexible Solutions and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and PennantPark Floating Rate, you can compare the effects of market volatilities on Flexible Solutions 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 Flexible Solutions with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and PennantPark Floating.
Diversification Opportunities for Flexible Solutions and PennantPark Floating
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flexible and PennantPark is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation 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 Flexible Solutions 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 Flexible Solutions International 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 Flexible Solutions i.e., Flexible Solutions and PennantPark Floating go up and down completely randomly.
Pair Corralation between Flexible Solutions and PennantPark Floating
Considering the 90-day investment horizon Flexible Solutions International is expected to generate 5.74 times more return on investment than PennantPark Floating. However, Flexible Solutions is 5.74 times more volatile than PennantPark Floating Rate. It trades about -0.01 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 415.00 in Flexible Solutions International on August 29, 2024 and sell it today you would lose (14.00) from holding Flexible Solutions International or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. PennantPark Floating Rate
Performance |
| Timeline |
| Flexible Solutions |
| PennantPark Floating Rate |
Flexible Solutions and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and PennantPark Floating
The main advantage of trading using opposite Flexible Solutions and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions 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.| Flexible Solutions vs. Oil Dri | Flexible Solutions vs. H B Fuller | Flexible Solutions vs. Northern Technologies | Flexible Solutions vs. Cabot |
| PennantPark Floating vs. Aurora Innovation | PennantPark Floating vs. HUMANA INC | PennantPark Floating vs. Aquagold International | PennantPark Floating vs. Barloworld Ltd ADR |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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