Correlation Between PennantPark Floating and Sure Tech
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Sure Tech 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 PennantPark Floating and Sure Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Floating Rate and Sure Tech Investments LP, you can compare the effects of market volatilities on PennantPark Floating and Sure Tech 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 PennantPark Floating with a short position of Sure Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Sure Tech.
Diversification Opportunities for PennantPark Floating and Sure Tech
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and Sure is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Sure Tech Investments LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sure Tech Investments and PennantPark Floating 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 PennantPark Floating Rate are associated (or correlated) with Sure Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sure Tech Investments has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Sure Tech go up and down completely randomly.
Pair Corralation between PennantPark Floating and Sure Tech
Assuming the 90 days trading horizon PennantPark Floating Rate is expected to generate 3.52 times more return on investment than Sure Tech. However, PennantPark Floating is 3.52 times more volatile than Sure Tech Investments LP. It trades about 0.07 of its potential returns per unit of risk. Sure Tech Investments LP is currently generating about -0.01 per unit of risk. If you would invest 57,287 in PennantPark Floating Rate on September 3, 2024 and sell it today you would lose (53,114) from holding PennantPark Floating Rate or give up 92.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Sure Tech Investments LP
Performance |
| Timeline |
| PennantPark Floating Rate |
| Sure Tech Investments |
PennantPark Floating and Sure Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Sure Tech
The main advantage of trading using opposite PennantPark Floating and Sure Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Sure Tech 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 Sure Tech will offset losses from the drop in Sure Tech's long position.| PennantPark Floating vs. First International Bank | PennantPark Floating vs. Mivtach Shamir | PennantPark Floating vs. Atreyu Capital Markets | PennantPark Floating vs. IDI Insurance |
| Sure Tech vs. PennantPark Floating Rate | Sure Tech vs. Meitav Dash Investments | Sure Tech vs. IBI Inv House | Sure Tech vs. Mivtach Shamir |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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