Correlation Between PennantPark Floating and Liberty Media
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Liberty Media 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 Liberty Media 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 Liberty Media, you can compare the effects of market volatilities on PennantPark Floating and Liberty Media 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 Liberty Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Liberty Media.
Diversification Opportunities for PennantPark Floating and Liberty Media
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PennantPark and Liberty is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Liberty Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Media 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 Liberty Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Media has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Liberty Media go up and down completely randomly.
Pair Corralation between PennantPark Floating and Liberty Media
Given the investment horizon of 90 days PennantPark Floating is expected to generate 18.65 times less return on investment than Liberty Media. But when comparing it to its historical volatility, PennantPark Floating Rate is 1.71 times less risky than Liberty Media. It trades about 0.01 of its potential returns per unit of risk. Liberty Media is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7,135 in Liberty Media on November 28, 2024 and sell it today you would earn a total of 303.50 from holding Liberty Media or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Liberty Media
Performance |
| Timeline |
| PennantPark Floating Rate |
| Liberty Media |
PennantPark Floating and Liberty Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Liberty Media
The main advantage of trading using opposite PennantPark Floating and Liberty Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Liberty Media 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 Liberty Media will offset losses from the drop in Liberty Media'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 |
| Liberty Media vs. Asure Software | Liberty Media vs. Iridium Communications | Liberty Media vs. Weibo Corp | Liberty Media vs. ServiceNow |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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