Correlation Between PennantPark Floating and Mativ Holdings
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Mativ Holdings 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 Mativ Holdings 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 Mativ Holdings, you can compare the effects of market volatilities on PennantPark Floating and Mativ Holdings 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 Mativ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Mativ Holdings.
Diversification Opportunities for PennantPark Floating and Mativ Holdings
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PennantPark and Mativ is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Mativ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mativ 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 Mativ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mativ Holdings has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Mativ Holdings go up and down completely randomly.
Pair Corralation between PennantPark Floating and Mativ Holdings
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.35 times more return on investment than Mativ Holdings. However, PennantPark Floating Rate is 2.84 times less risky than Mativ Holdings. It trades about 0.04 of its potential returns per unit of risk. Mativ Holdings is currently generating about 0.0 per unit of risk. If you would invest 913.00 in PennantPark Floating Rate on August 27, 2024 and sell it today you would earn a total of 194.00 from holding PennantPark Floating Rate or generate 21.25% 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. Mativ Holdings
Performance |
| Timeline |
| PennantPark Floating Rate |
| Mativ Holdings |
PennantPark Floating and Mativ Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Mativ Holdings
The main advantage of trading using opposite PennantPark Floating and Mativ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Mativ Holdings 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 Mativ Holdings will offset losses from the drop in Mativ Holdings' long position.| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
| Mativ Holdings vs. Orion Engineered Carbons | Mativ Holdings vs. Select Energy Services | Mativ Holdings vs. Perimeter Solutions SA | Mativ Holdings vs. FutureFuel Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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