Correlation Between Henderson Investment and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Henderson Investment 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 Henderson Investment and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henderson Investment Ltd and PennantPark Floating Rate, you can compare the effects of market volatilities on Henderson Investment 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 Henderson Investment with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henderson Investment and PennantPark Floating.
Diversification Opportunities for Henderson Investment and PennantPark Floating
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Henderson and PennantPark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Henderson Investment Ltd 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 Henderson Investment 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 Henderson Investment Ltd 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 Henderson Investment i.e., Henderson Investment and PennantPark Floating go up and down completely randomly.
Pair Corralation between Henderson Investment and PennantPark Floating
Assuming the 90 days horizon Henderson Investment Ltd is expected to generate 20.9 times more return on investment than PennantPark Floating. However, Henderson Investment is 20.9 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 0.02 per unit of risk. If you would invest 7.80 in Henderson Investment Ltd on September 14, 2024 and sell it today you would earn a total of 3.20 from holding Henderson Investment Ltd or generate 41.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Henderson Investment Ltd vs. PennantPark Floating Rate
Performance |
| Timeline |
| Henderson Investment |
| PennantPark Floating Rate |
Henderson Investment and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henderson Investment and PennantPark Floating
The main advantage of trading using opposite Henderson Investment and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henderson Investment 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.| Henderson Investment vs. SM Investments | Henderson Investment vs. Dillards | Henderson Investment vs. Shoprite Holdings Ltd | Henderson Investment vs. Aquagold International |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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