Correlation Between Investcorp Credit and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Investcorp Credit 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 Investcorp Credit and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investcorp Credit Management and PennantPark Floating Rate, you can compare the effects of market volatilities on Investcorp Credit 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 Investcorp Credit with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investcorp Credit and PennantPark Floating.
Diversification Opportunities for Investcorp Credit and PennantPark Floating
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Investcorp and PennantPark is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Investcorp Credit Management 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 Investcorp Credit 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 Investcorp Credit Management 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 Investcorp Credit i.e., Investcorp Credit and PennantPark Floating go up and down completely randomly.
Pair Corralation between Investcorp Credit and PennantPark Floating
Given the investment horizon of 90 days Investcorp Credit Management is expected to generate 3.2 times more return on investment than PennantPark Floating. However, Investcorp Credit is 3.2 times more volatile than PennantPark Floating Rate. It trades about 0.19 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 299.00 in Investcorp Credit Management on September 1, 2024 and sell it today you would earn a total of 26.00 from holding Investcorp Credit Management or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investcorp Credit Management vs. PennantPark Floating Rate
Performance |
| Timeline |
| Investcorp Credit |
| PennantPark Floating Rate |
Investcorp Credit and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investcorp Credit and PennantPark Floating
The main advantage of trading using opposite Investcorp Credit and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investcorp Credit 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.| Investcorp Credit vs. Presidio Property Trust | Investcorp Credit vs. Great Elm Capital | Investcorp Credit vs. Portman Ridge Finance | Investcorp Credit vs. OFS Capital Corp |
| PennantPark Floating vs. Visa Class A | PennantPark Floating vs. Diamond Hill Investment | PennantPark Floating vs. Distoken Acquisition | PennantPark Floating vs. Associated Capital Group |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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