Correlation Between PennantPark Floating and Kinsale Capital
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Kinsale Capital 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 Kinsale Capital 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 Kinsale Capital Group, you can compare the effects of market volatilities on PennantPark Floating and Kinsale Capital 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 Kinsale Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Kinsale Capital.
Diversification Opportunities for PennantPark Floating and Kinsale Capital
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and Kinsale is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Kinsale Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsale Capital Group 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 Kinsale Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsale Capital Group has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Kinsale Capital go up and down completely randomly.
Pair Corralation between PennantPark Floating and Kinsale Capital
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.47 times more return on investment than Kinsale Capital. However, PennantPark Floating Rate is 2.12 times less risky than Kinsale Capital. It trades about 0.05 of its potential returns per unit of risk. Kinsale Capital Group is currently generating about -0.06 per unit of risk. If you would invest 1,120 in PennantPark Floating Rate on November 27, 2024 and sell it today you would earn a total of 13.00 from holding PennantPark Floating Rate or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Kinsale Capital Group
Performance |
| Timeline |
| PennantPark Floating Rate |
| Kinsale Capital Group |
PennantPark Floating and Kinsale Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Kinsale Capital
The main advantage of trading using opposite PennantPark Floating and Kinsale Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Kinsale Capital 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 Kinsale Capital will offset losses from the drop in Kinsale Capital'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 |
| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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