Correlation Between PennantPark Floating and Gaxosai
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Gaxosai 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 Gaxosai 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 Gaxosai, you can compare the effects of market volatilities on PennantPark Floating and Gaxosai 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 Gaxosai. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Gaxosai.
Diversification Opportunities for PennantPark Floating and Gaxosai
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and Gaxosai is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Gaxosai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaxosai 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 Gaxosai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaxosai has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Gaxosai go up and down completely randomly.
Pair Corralation between PennantPark Floating and Gaxosai
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.15 times more return on investment than Gaxosai. However, PennantPark Floating Rate is 6.84 times less risky than Gaxosai. It trades about 0.03 of its potential returns per unit of risk. Gaxosai is currently generating about -0.11 per unit of risk. If you would invest 1,080 in PennantPark Floating Rate on September 1, 2024 and sell it today you would earn a total of 36.00 from holding PennantPark Floating Rate or generate 3.33% 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. Gaxosai
Performance |
| Timeline |
| PennantPark Floating Rate |
| Gaxosai |
PennantPark Floating and Gaxosai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Gaxosai
The main advantage of trading using opposite PennantPark Floating and Gaxosai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Gaxosai 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 Gaxosai will offset losses from the drop in Gaxosai's long position.| PennantPark Floating vs. Visa Class A | PennantPark Floating vs. Diamond Hill Investment | PennantPark Floating vs. Distoken Acquisition | PennantPark Floating vs. Associated Capital Group |
| Gaxosai vs. Eastman Kodak Co | Gaxosai vs. Academy Sports Outdoors | Gaxosai vs. Neogen | Gaxosai vs. Delek Logistics Partners |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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