Correlation Between Kraft Heinz and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz 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 Kraft Heinz and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Heinz Co and PennantPark Floating Rate, you can compare the effects of market volatilities on Kraft Heinz 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 Kraft Heinz with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and PennantPark Floating.
Diversification Opportunities for Kraft Heinz and PennantPark Floating
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kraft and PennantPark is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co 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 Kraft Heinz 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 Kraft Heinz Co 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 Kraft Heinz i.e., Kraft Heinz and PennantPark Floating go up and down completely randomly.
Pair Corralation between Kraft Heinz and PennantPark Floating
Considering the 90-day investment horizon Kraft Heinz Co is expected to under-perform the PennantPark Floating. In addition to that, Kraft Heinz is 1.07 times more volatile than PennantPark Floating Rate. It trades about -0.01 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 886.00 in PennantPark Floating Rate on September 1, 2024 and sell it today you would earn a total of 230.00 from holding PennantPark Floating Rate or generate 25.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Heinz Co vs. PennantPark Floating Rate
Performance |
| Timeline |
| Kraft Heinz |
| PennantPark Floating Rate |
Kraft Heinz and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Heinz and PennantPark Floating
The main advantage of trading using opposite Kraft Heinz and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz 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.| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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