Correlation Between PennantPark Floating and Air Products
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Air Products 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 Air Products 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 Air Products and, you can compare the effects of market volatilities on PennantPark Floating and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Air Products.
Diversification Opportunities for PennantPark Floating and Air Products
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and Air is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Air Products go up and down completely randomly.
Pair Corralation between PennantPark Floating and Air Products
Given the investment horizon of 90 days PennantPark Floating is expected to generate 4.69 times less return on investment than Air Products. But when comparing it to its historical volatility, PennantPark Floating Rate is 1.78 times less risky than Air Products. It trades about 0.05 of its potential returns per unit of risk. Air Products and is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 21,414 in Air Products and on November 5, 2024 and sell it today you would earn a total of 12,112 from holding Air Products and or generate 56.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Air Products and
Performance |
| Timeline |
| PennantPark Floating Rate |
| Air Products |
PennantPark Floating and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Air Products
The main advantage of trading using opposite PennantPark Floating and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |