Correlation Between PennantPark Floating and Ispire Technology
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Ispire Technology 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 Ispire Technology 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 Ispire Technology Common, you can compare the effects of market volatilities on PennantPark Floating and Ispire Technology 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 Ispire Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Ispire Technology.
Diversification Opportunities for PennantPark Floating and Ispire Technology
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PennantPark and Ispire is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Ispire Technology Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ispire Technology Common 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 Ispire Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ispire Technology Common has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Ispire Technology go up and down completely randomly.
Pair Corralation between PennantPark Floating and Ispire Technology
Given the investment horizon of 90 days PennantPark Floating is expected to generate 26.96 times less return on investment than Ispire Technology. But when comparing it to its historical volatility, PennantPark Floating Rate is 7.33 times less risky than Ispire Technology. It trades about 0.02 of its potential returns per unit of risk. Ispire Technology Common is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 597.00 in Ispire Technology Common on August 31, 2024 and sell it today you would earn a total of 23.00 from holding Ispire Technology Common or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Ispire Technology Common
Performance |
| Timeline |
| PennantPark Floating Rate |
| Ispire Technology Common |
PennantPark Floating and Ispire Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Ispire Technology
The main advantage of trading using opposite PennantPark Floating and Ispire Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Ispire Technology 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 Ispire Technology will offset losses from the drop in Ispire Technology's long position.| PennantPark Floating vs. Ares Capital | PennantPark Floating vs. Hercules Capital | PennantPark Floating vs. Main Street Capital |
| Ispire Technology vs. American Airlines Group | Ispire Technology vs. Bright Scholar Education | Ispire Technology vs. Scholastic | Ispire Technology vs. WEBTOON Entertainment Common |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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