Correlation Between PennantPark Floating and Alumina
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Alumina 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 Alumina 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 Alumina Limited, you can compare the effects of market volatilities on PennantPark Floating and Alumina 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 Alumina. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Alumina.
Diversification Opportunities for PennantPark Floating and Alumina
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and Alumina is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Alumina Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumina Limited 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 Alumina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumina Limited has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Alumina go up and down completely randomly.
Pair Corralation between PennantPark Floating and Alumina
If you would invest 1,090 in PennantPark Floating Rate on September 3, 2024 and sell it today you would earn a total of 26.00 from holding PennantPark Floating Rate or generate 2.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 5.0% |
Values | Daily Returns |
PennantPark Floating Rate vs. Alumina Limited
Performance |
Timeline |
PennantPark Floating Rate |
Alumina Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PennantPark Floating and Alumina Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PennantPark Floating and Alumina
The main advantage of trading using opposite PennantPark Floating and Alumina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Alumina 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 Alumina will offset losses from the drop in Alumina's long position.PennantPark Floating vs. Federated Premier Municipal | PennantPark Floating vs. Blackrock Muniyield | PennantPark Floating vs. Federated Investors B | PennantPark Floating vs. SEI Investments |
Alumina vs. Coupang LLC | Alumina vs. Boston Beer | Alumina vs. Asbury Automotive Group | Alumina vs. Getty Realty |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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