Correlation Between PennantPark Floating and Axalta Coating
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Axalta Coating 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 Axalta Coating 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 Axalta Coating Systems, you can compare the effects of market volatilities on PennantPark Floating and Axalta Coating 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 Axalta Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Axalta Coating.
Diversification Opportunities for PennantPark Floating and Axalta Coating
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and Axalta is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Axalta Coating Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axalta Coating Systems 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 Axalta Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axalta Coating Systems has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Axalta Coating go up and down completely randomly.
Pair Corralation between PennantPark Floating and Axalta Coating
Given the investment horizon of 90 days PennantPark Floating is expected to generate 21.25 times less return on investment than Axalta Coating. But when comparing it to its historical volatility, PennantPark Floating Rate is 2.09 times less risky than Axalta Coating. It trades about 0.02 of its potential returns per unit of risk. Axalta Coating Systems is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,792 in Axalta Coating Systems on September 1, 2024 and sell it today you would earn a total of 254.00 from holding Axalta Coating Systems or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Axalta Coating Systems
Performance |
| Timeline |
| PennantPark Floating Rate |
| Axalta Coating Systems |
PennantPark Floating and Axalta Coating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Axalta Coating
The main advantage of trading using opposite PennantPark Floating and Axalta Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Axalta Coating 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 Axalta Coating will offset losses from the drop in Axalta Coating's long position.| PennantPark Floating vs. Visa Class A | PennantPark Floating vs. Diamond Hill Investment | PennantPark Floating vs. Distoken Acquisition | PennantPark Floating vs. Associated Capital Group |
| Axalta Coating vs. Linde plc Ordinary | Axalta Coating vs. Air Products and | Axalta Coating vs. Aquagold International | Axalta Coating vs. Thrivent High Yield |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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