Correlation Between PennantPark Floating and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Gladstone Investment 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 Gladstone Investment 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 Gladstone Investment, you can compare the effects of market volatilities on PennantPark Floating and Gladstone Investment 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 Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Gladstone Investment.
Diversification Opportunities for PennantPark Floating and Gladstone Investment
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and Gladstone is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment 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 Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Gladstone Investment go up and down completely randomly.
Pair Corralation between PennantPark Floating and Gladstone Investment
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.66 times more return on investment than Gladstone Investment. However, PennantPark Floating Rate is 1.51 times less risky than Gladstone Investment. It trades about -0.13 of its potential returns per unit of risk. Gladstone Investment is currently generating about -0.09 per unit of risk. If you would invest 1,134 in PennantPark Floating Rate on August 23, 2024 and sell it today you would lose (30.00) from holding PennantPark Floating Rate or give up 2.65% 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. Gladstone Investment
Performance |
| Timeline |
| PennantPark Floating Rate |
| Gladstone Investment |
PennantPark Floating and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Gladstone Investment
The main advantage of trading using opposite PennantPark Floating and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment'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 |
| Gladstone Investment vs. PennantPark Floating Rate | Gladstone Investment vs. Horizon Technology Finance | Gladstone Investment vs. Stellus Capital Investment | Gladstone Investment vs. Prospect Capital |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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