Correlation Between PennantPark Floating and La Rosa
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and La Rosa 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 La Rosa 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 La Rosa Holdings, you can compare the effects of market volatilities on PennantPark Floating and La Rosa 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 La Rosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and La Rosa.
Diversification Opportunities for PennantPark Floating and La Rosa
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and LRHC is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and La Rosa Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Rosa Holdings 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 La Rosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Rosa Holdings has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and La Rosa go up and down completely randomly.
Pair Corralation between PennantPark Floating and La Rosa
Given the investment horizon of 90 days PennantPark Floating is expected to generate 16.31 times less return on investment than La Rosa. But when comparing it to its historical volatility, PennantPark Floating Rate is 17.09 times less risky than La Rosa. It trades about 0.03 of its potential returns per unit of risk. La Rosa Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 171.00 in La Rosa Holdings on September 12, 2024 and sell it today you would lose (102.80) from holding La Rosa Holdings or give up 60.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. La Rosa Holdings
Performance |
| Timeline |
| PennantPark Floating Rate |
| La Rosa Holdings |
PennantPark Floating and La Rosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and La Rosa
The main advantage of trading using opposite PennantPark Floating and La Rosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, La Rosa 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 La Rosa will offset losses from the drop in La Rosa's long position.| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital | PennantPark Floating vs. Gladstone Capital |
| La Rosa vs. Boston Beer | La Rosa vs. Westrock Coffee | La Rosa vs. Compania Cervecerias Unidas | La Rosa vs. Siriuspoint |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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