Correlation Between PennantPark Floating and Investcorp Credit
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Investcorp Credit 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 Investcorp Credit 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 Investcorp Credit Management, you can compare the effects of market volatilities on PennantPark Floating and Investcorp Credit 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 Investcorp Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Investcorp Credit.
Diversification Opportunities for PennantPark Floating and Investcorp Credit
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and Investcorp is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Investcorp Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Credit 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 Investcorp Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp Credit has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Investcorp Credit go up and down completely randomly.
Pair Corralation between PennantPark Floating and Investcorp Credit
Given the investment horizon of 90 days PennantPark Floating is expected to generate 27.98 times less return on investment than Investcorp Credit. But when comparing it to its historical volatility, PennantPark Floating Rate is 3.2 times less risky than Investcorp Credit. It trades about 0.02 of its potential returns per unit of risk. Investcorp Credit Management is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 299.00 in Investcorp Credit Management on September 1, 2024 and sell it today you would earn a total of 26.00 from holding Investcorp Credit Management or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Investcorp Credit Management
Performance |
| Timeline |
| PennantPark Floating Rate |
| Investcorp Credit |
PennantPark Floating and Investcorp Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Investcorp Credit
The main advantage of trading using opposite PennantPark Floating and Investcorp Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Investcorp Credit 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 Investcorp Credit will offset losses from the drop in Investcorp Credit'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 |
| Investcorp Credit vs. Presidio Property Trust | Investcorp Credit vs. Great Elm Capital | Investcorp Credit vs. Portman Ridge Finance | Investcorp Credit vs. OFS Capital Corp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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