Correlation Between PennantPark Floating and Indivior PLC
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Indivior PLC 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 Indivior PLC 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 Indivior PLC Ordinary, you can compare the effects of market volatilities on PennantPark Floating and Indivior PLC 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 Indivior PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Indivior PLC.
Diversification Opportunities for PennantPark Floating and Indivior PLC
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PennantPark and Indivior is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Indivior PLC Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indivior PLC Ordinary 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 Indivior PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indivior PLC Ordinary has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Indivior PLC go up and down completely randomly.
Pair Corralation between PennantPark Floating and Indivior PLC
Given the investment horizon of 90 days PennantPark Floating Rate is expected to under-perform the Indivior PLC. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Floating Rate is 5.25 times less risky than Indivior PLC. The stock trades about -0.18 of its potential returns per unit of risk. The Indivior PLC Ordinary is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 892.00 in Indivior PLC Ordinary on August 28, 2024 and sell it today you would earn a total of 197.00 from holding Indivior PLC Ordinary or generate 22.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Indivior PLC Ordinary
Performance |
| Timeline |
| PennantPark Floating Rate |
| Indivior PLC Ordinary |
PennantPark Floating and Indivior PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Indivior PLC
The main advantage of trading using opposite PennantPark Floating and Indivior PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Indivior PLC 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 Indivior PLC will offset losses from the drop in Indivior PLC'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 |
| Indivior PLC vs. Burlington Stores | Indivior PLC vs. GameStop Corp | Indivior PLC vs. Corsair Gaming | Indivior PLC vs. Skechers USA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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