Correlation Between PennantPark Floating and Mill City
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Mill City 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 Mill City 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 Mill City Ventures, you can compare the effects of market volatilities on PennantPark Floating and Mill City 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 Mill City. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Mill City.
Diversification Opportunities for PennantPark Floating and Mill City
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and Mill is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Mill City go up and down completely randomly.
Pair Corralation between PennantPark Floating and Mill City
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.18 times more return on investment than Mill City. However, PennantPark Floating Rate is 5.58 times less risky than Mill City. It trades about -0.04 of its potential returns per unit of risk. Mill City Ventures is currently generating about -0.02 per unit of risk. If you would invest 1,115 in PennantPark Floating Rate on August 30, 2024 and sell it today you would lose (8.00) from holding PennantPark Floating Rate or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Mill City Ventures
Performance |
| Timeline |
| PennantPark Floating Rate |
| Mill City Ventures |
PennantPark Floating and Mill City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Mill City
The main advantage of trading using opposite PennantPark Floating and Mill City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Mill City 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 Mill City will offset losses from the drop in Mill City'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 |
| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |