Correlation Between PennantPark Floating and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Canlan Ice 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 Canlan Ice 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 Canlan Ice Sports, you can compare the effects of market volatilities on PennantPark Floating and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Canlan Ice.
Diversification Opportunities for PennantPark Floating and Canlan Ice
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and Canlan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Canlan Ice go up and down completely randomly.
Pair Corralation between PennantPark Floating and Canlan Ice
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 12.74 times more return on investment than Canlan Ice. However, PennantPark Floating is 12.74 times more volatile than Canlan Ice Sports. It trades about 0.03 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.13 per unit of risk. If you would invest 922.00 in PennantPark Floating Rate on August 25, 2024 and sell it today you would earn a total of 185.00 from holding PennantPark Floating Rate or generate 20.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Canlan Ice Sports
Performance |
| Timeline |
| PennantPark Floating Rate |
| Canlan Ice Sports |
PennantPark Floating and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Canlan Ice
The main advantage of trading using opposite PennantPark Floating and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice'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 |
| Canlan Ice vs. HUMANA INC | Canlan Ice vs. Aquagold International | Canlan Ice vs. Barloworld Ltd ADR | Canlan Ice vs. Morningstar Unconstrained Allocation |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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