Correlation Between PennantPark Floating and US Global
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and US Global 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 US Global 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 US Global Investors, you can compare the effects of market volatilities on PennantPark Floating and US Global 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 US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and US Global.
Diversification Opportunities for PennantPark Floating and US Global
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and GROW is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and US Global Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Investors 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 US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Investors has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and US Global go up and down completely randomly.
Pair Corralation between PennantPark Floating and US Global
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.82 times more return on investment than US Global. However, PennantPark Floating Rate is 1.22 times less risky than US Global. It trades about 0.04 of its potential returns per unit of risk. US Global Investors is currently generating about 0.0 per unit of risk. If you would invest 913.00 in PennantPark Floating Rate on August 27, 2024 and sell it today you would earn a total of 194.00 from holding PennantPark Floating Rate or generate 21.25% 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. US Global Investors
Performance |
| Timeline |
| PennantPark Floating Rate |
| US Global Investors |
PennantPark Floating and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and US Global
The main advantage of trading using opposite PennantPark Floating and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global'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 |
| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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