Correlation Between PennantPark Floating and Crescent Capital
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Crescent Capital 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 Crescent Capital 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 Crescent Capital BDC, you can compare the effects of market volatilities on PennantPark Floating and Crescent Capital 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 Crescent Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Crescent Capital.
Diversification Opportunities for PennantPark Floating and Crescent Capital
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between PennantPark and Crescent is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Crescent Capital BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Capital BDC 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 Crescent Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Capital BDC has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Crescent Capital go up and down completely randomly.
Pair Corralation between PennantPark Floating and Crescent Capital
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.86 times more return on investment than Crescent Capital. However, PennantPark Floating Rate is 1.16 times less risky than Crescent Capital. It trades about 0.18 of its potential returns per unit of risk. Crescent Capital BDC is currently generating about 0.1 per unit of risk. If you would invest 1,089 in PennantPark Floating Rate on November 3, 2024 and sell it today you would earn a total of 34.00 from holding PennantPark Floating Rate or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Crescent Capital BDC
Performance |
| Timeline |
| PennantPark Floating Rate |
| Crescent Capital BDC |
PennantPark Floating and Crescent Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Crescent Capital
The main advantage of trading using opposite PennantPark Floating and Crescent Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Crescent Capital 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 Crescent Capital will offset losses from the drop in Crescent Capital's long position.| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
| Crescent Capital vs. BlackRock TCP Capital | Crescent Capital vs. Triplepoint Venture Growth | Crescent Capital vs. Sixth Street Specialty | Crescent Capital vs. Golub Capital BDC |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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