Correlation Between KNOT Offshore and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore 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 KNOT Offshore and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KNOT Offshore Partners and PennantPark Floating Rate, you can compare the effects of market volatilities on KNOT Offshore 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 KNOT Offshore with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and PennantPark Floating.
Diversification Opportunities for KNOT Offshore and PennantPark Floating
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KNOT and PennantPark is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners 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 KNOT Offshore 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 KNOT Offshore Partners 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 KNOT Offshore i.e., KNOT Offshore and PennantPark Floating go up and down completely randomly.
Pair Corralation between KNOT Offshore and PennantPark Floating
Given the investment horizon of 90 days KNOT Offshore is expected to generate 1.0 times less return on investment than PennantPark Floating. In addition to that, KNOT Offshore is 2.84 times more volatile than PennantPark Floating Rate. It trades about 0.02 of its total potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.06 per unit of volatility. If you would invest 929.00 in PennantPark Floating Rate on August 31, 2024 and sell it today you would earn a total of 187.00 from holding PennantPark Floating Rate or generate 20.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. PennantPark Floating Rate
Performance |
| Timeline |
| KNOT Offshore Partners |
| PennantPark Floating Rate |
KNOT Offshore and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and PennantPark Floating
The main advantage of trading using opposite KNOT Offshore and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore 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.| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
| PennantPark Floating vs. Ares Capital | PennantPark Floating vs. Hercules Capital | PennantPark Floating vs. Main Street 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |