Correlation Between PennantPark Floating and Eagle Point
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Eagle Point 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 Eagle Point 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 Eagle Point Credit, you can compare the effects of market volatilities on PennantPark Floating and Eagle Point 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 Eagle Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Eagle Point.
Diversification Opportunities for PennantPark Floating and Eagle Point
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and Eagle is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Eagle Point Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Credit 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 Eagle Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Point Credit has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Eagle Point go up and down completely randomly.
Pair Corralation between PennantPark Floating and Eagle Point
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.86 times more return on investment than Eagle Point. However, PennantPark Floating Rate is 1.16 times less risky than Eagle Point. It trades about -0.15 of its potential returns per unit of risk. Eagle Point Credit is currently generating about -0.17 per unit of risk. If you would invest 1,138 in PennantPark Floating Rate on August 29, 2024 and sell it today you would lose (32.00) from holding PennantPark Floating Rate or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Eagle Point Credit
Performance |
| Timeline |
| PennantPark Floating Rate |
| Eagle Point Credit |
PennantPark Floating and Eagle Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Eagle Point
The main advantage of trading using opposite PennantPark Floating and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Eagle Point 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 Eagle Point will offset losses from the drop in Eagle Point's long position.| PennantPark Floating vs. TPG Inc | PennantPark Floating vs. Carlyle Secured Lending | PennantPark Floating vs. Brookfield Corp |
| Eagle Point vs. Cornerstone Strategic Return | Eagle Point vs. Cornerstone Strategic Value | Eagle Point vs. Oxford Square Capital | Eagle Point vs. Guggenheim Strategic Opportunities |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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