Correlation Between PennantPark Floating and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks Plc, you can compare the effects of market volatilities on PennantPark Floating and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Fevertree Drinks.
Diversification Opportunities for PennantPark Floating and Fevertree Drinks
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between PennantPark and Fevertree is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks Plc 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Fevertree Drinks go up and down completely randomly.
Pair Corralation between PennantPark Floating and Fevertree Drinks
Given the investment horizon of 90 days PennantPark Floating Rate is expected to under-perform the Fevertree Drinks. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Floating Rate is 4.42 times less risky than Fevertree Drinks. The stock trades about 0.0 of its potential returns per unit of risk. The Fevertree Drinks Plc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 802.00 in Fevertree Drinks Plc on November 28, 2024 and sell it today you would earn a total of 97.00 from holding Fevertree Drinks Plc or generate 12.09% 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. Fevertree Drinks Plc
Performance |
| Timeline |
| PennantPark Floating Rate |
| Fevertree Drinks Plc |
PennantPark Floating and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Fevertree Drinks
The main advantage of trading using opposite PennantPark Floating and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
| Fevertree Drinks vs. National Beverage Corp | Fevertree Drinks vs. Celsius Holdings | Fevertree Drinks vs. Monster Beverage Corp | Fevertree Drinks vs. Coca Cola Femsa SAB |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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