Correlation Between PennantPark Floating and Bt Brands
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Bt Brands 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 Bt Brands 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 Bt Brands, you can compare the effects of market volatilities on PennantPark Floating and Bt Brands 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 Bt Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Bt Brands.
Diversification Opportunities for PennantPark Floating and Bt Brands
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and BTBD is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Bt Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bt Brands 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 Bt Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bt Brands has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Bt Brands go up and down completely randomly.
Pair Corralation between PennantPark Floating and Bt Brands
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.17 times more return on investment than Bt Brands. However, PennantPark Floating Rate is 5.9 times less risky than Bt Brands. It trades about 0.07 of its potential returns per unit of risk. Bt Brands is currently generating about 0.01 per unit of risk. If you would invest 809.00 in PennantPark Floating Rate on December 4, 2024 and sell it today you would earn a total of 304.00 from holding PennantPark Floating Rate or generate 37.58% 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. Bt Brands
Performance |
| Timeline |
| PennantPark Floating Rate |
| Bt Brands |
PennantPark Floating and Bt Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Bt Brands
The main advantage of trading using opposite PennantPark Floating and Bt Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Bt Brands 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 Bt Brands will offset losses from the drop in Bt Brands' long position.| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
| Bt Brands vs. Alsea SAB de | Bt Brands vs. Marstons PLC | Bt Brands vs. Bagger Daves Burger | Bt Brands vs. Marstons PLC |
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 CEOs Directory module to screen CEOs from public companies around the world.
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