Correlation Between Thrivent High and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Thrivent High and PennantPark Investment 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 Thrivent High and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thrivent High Yield and PennantPark Investment, you can compare the effects of market volatilities on Thrivent High and PennantPark Investment 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 Thrivent High with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent High and PennantPark Investment.
Diversification Opportunities for Thrivent High and PennantPark Investment
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thrivent and PennantPark is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Thrivent High 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 Thrivent High Yield are associated (or correlated) with PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Thrivent High i.e., Thrivent High and PennantPark Investment go up and down completely randomly.
Pair Corralation between Thrivent High and PennantPark Investment
Assuming the 90 days horizon Thrivent High Yield is expected to under-perform the PennantPark Investment. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent High Yield is 5.33 times less risky than PennantPark Investment. The mutual fund trades about -0.29 of its potential returns per unit of risk. The PennantPark Investment is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 686.00 in PennantPark Investment on September 26, 2024 and sell it today you would earn a total of 14.00 from holding PennantPark Investment or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thrivent High Yield vs. PennantPark Investment
Performance |
| Timeline |
| Thrivent High Yield |
| PennantPark Investment |
Thrivent High and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thrivent High and PennantPark Investment
The main advantage of trading using opposite Thrivent High and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent High position performs unexpectedly, PennantPark Investment 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 Investment will offset losses from the drop in PennantPark Investment's long position.| Thrivent High vs. Thrivent Limited Maturity | Thrivent High vs. Thrivent Income Fund | Thrivent High vs. Thrivent Large Cap | Thrivent High vs. Thrivent Large Cap |
| PennantPark Investment vs. Sixth Street Specialty | PennantPark Investment vs. New Mountain Finance | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. BlackRock TCP 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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