Correlation Between PennantPark Floating and Vita Coco
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Vita Coco 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 Vita Coco 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 Vita Coco, you can compare the effects of market volatilities on PennantPark Floating and Vita Coco 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 Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Vita Coco.
Diversification Opportunities for PennantPark Floating and Vita Coco
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and Vita is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco 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 Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Vita Coco go up and down completely randomly.
Pair Corralation between PennantPark Floating and Vita Coco
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.38 times more return on investment than Vita Coco. However, PennantPark Floating Rate is 2.63 times less risky than Vita Coco. It trades about 0.0 of its potential returns per unit of risk. Vita Coco is currently generating about -0.16 per unit of risk. If you would invest 1,120 in PennantPark Floating Rate on November 28, 2024 and sell it today you would lose (2.00) from holding PennantPark Floating Rate or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Vita Coco
Performance |
| Timeline |
| PennantPark Floating Rate |
| Vita Coco |
PennantPark Floating and Vita Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Vita Coco
The main advantage of trading using opposite PennantPark Floating and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco'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 |
| Vita Coco vs. Coca Cola Femsa SAB | Vita Coco vs. Coca Cola European Partners | Vita Coco vs. Embotelladora Andina SA | Vita Coco vs. Monster Beverage Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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