Correlation Between National CineMedia and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both National CineMedia 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 National CineMedia and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and PennantPark Floating Rate, you can compare the effects of market volatilities on National CineMedia 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 National CineMedia with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and PennantPark Floating.
Diversification Opportunities for National CineMedia and PennantPark Floating
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and PennantPark is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia 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 National CineMedia 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 National CineMedia 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 National CineMedia i.e., National CineMedia and PennantPark Floating go up and down completely randomly.
Pair Corralation between National CineMedia and PennantPark Floating
Given the investment horizon of 90 days National CineMedia is expected to generate 3.8 times more return on investment than PennantPark Floating. However, National CineMedia is 3.8 times more volatile than PennantPark Floating Rate. It trades about 0.09 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.06 per unit of risk. If you would invest 375.00 in National CineMedia on November 3, 2024 and sell it today you would earn a total of 284.00 from holding National CineMedia or generate 75.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. PennantPark Floating Rate
Performance |
| Timeline |
| National CineMedia |
| PennantPark Floating Rate |
National CineMedia and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and PennantPark Floating
The main advantage of trading using opposite National CineMedia and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia 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.| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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