Correlation Between PennantPark Floating and Golub Capital
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Golub Capital 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 Golub Capital 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 Golub Capital BDC, you can compare the effects of market volatilities on PennantPark Floating and Golub Capital 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 Golub Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Golub Capital.
Diversification Opportunities for PennantPark Floating and Golub Capital
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and Golub is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Golub Capital BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golub Capital BDC 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 Golub Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golub Capital BDC has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Golub Capital go up and down completely randomly.
Pair Corralation between PennantPark Floating and Golub Capital
Given the investment horizon of 90 days PennantPark Floating Rate is expected to under-perform the Golub Capital. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Floating Rate is 1.14 times less risky than Golub Capital. The stock trades about -0.16 of its potential returns per unit of risk. The Golub Capital BDC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,551 in Golub Capital BDC on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Golub Capital BDC or generate 0.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Golub Capital BDC
Performance |
| Timeline |
| PennantPark Floating Rate |
| Golub Capital BDC |
PennantPark Floating and Golub Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Golub Capital
The main advantage of trading using opposite PennantPark Floating and Golub Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Golub Capital 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 Golub Capital will offset losses from the drop in Golub Capital's long position.| PennantPark Floating vs. Aurora Innovation | PennantPark Floating vs. HUMANA INC | PennantPark Floating vs. Aquagold International | PennantPark Floating vs. Barloworld Ltd ADR |
| Golub Capital vs. Aurora Innovation | Golub Capital vs. HUMANA INC | Golub Capital vs. Aquagold International | Golub Capital vs. Barloworld Ltd ADR |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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