Correlation Between NL Industries and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both NL Industries 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 NL Industries and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NL Industries and PennantPark Floating Rate, you can compare the effects of market volatilities on NL Industries 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 NL Industries with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of NL Industries and PennantPark Floating.
Diversification Opportunities for NL Industries and PennantPark Floating
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between NL Industries and PennantPark is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding NL Industries 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 NL Industries 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 NL Industries 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 NL Industries i.e., NL Industries and PennantPark Floating go up and down completely randomly.
Pair Corralation between NL Industries and PennantPark Floating
Allowing for the 90-day total investment horizon NL Industries is expected to generate 4.01 times more return on investment than PennantPark Floating. However, NL Industries is 4.01 times more volatile than PennantPark Floating Rate. It trades about 0.08 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.05 per unit of risk. If you would invest 471.00 in NL Industries on November 5, 2024 and sell it today you would earn a total of 299.00 from holding NL Industries or generate 63.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NL Industries vs. PennantPark Floating Rate
Performance |
| Timeline |
| NL Industries |
| PennantPark Floating Rate |
NL Industries and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NL Industries and PennantPark Floating
The main advantage of trading using opposite NL Industries and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NL Industries 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.| NL Industries vs. Brinks Company | NL Industries vs. Allegion PLC | NL Industries vs. Resideo Technologies | NL Industries vs. Mistras Group |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |