Correlation Between PennantPark Floating and Freedom Holding
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Freedom Holding 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 Freedom Holding 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 Freedom Holding Corp, you can compare the effects of market volatilities on PennantPark Floating and Freedom Holding 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 Freedom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Freedom Holding.
Diversification Opportunities for PennantPark Floating and Freedom Holding
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and Freedom is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Freedom Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Holding Corp 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 Freedom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Holding Corp has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Freedom Holding go up and down completely randomly.
Pair Corralation between PennantPark Floating and Freedom Holding
Given the investment horizon of 90 days PennantPark Floating is expected to generate 3.81 times less return on investment than Freedom Holding. But when comparing it to its historical volatility, PennantPark Floating Rate is 2.07 times less risky than Freedom Holding. It trades about 0.05 of its potential returns per unit of risk. Freedom Holding Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8,156 in Freedom Holding Corp on August 29, 2024 and sell it today you would earn a total of 3,582 from holding Freedom Holding Corp or generate 43.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Freedom Holding Corp
Performance |
| Timeline |
| PennantPark Floating Rate |
| Freedom Holding Corp |
PennantPark Floating and Freedom Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Freedom Holding
The main advantage of trading using opposite PennantPark Floating and Freedom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Freedom Holding 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 Freedom Holding will offset losses from the drop in Freedom Holding's long position.| PennantPark Floating vs. Carlyle Group | PennantPark Floating vs. TPG Inc | PennantPark Floating vs. Carlyle Secured Lending | PennantPark Floating vs. Brookfield Corp |
| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets |