Correlation Between PennantPark Floating and National CineMedia
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and National CineMedia 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 National CineMedia 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 National CineMedia, you can compare the effects of market volatilities on PennantPark Floating and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and National CineMedia.
Diversification Opportunities for PennantPark Floating and National CineMedia
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PennantPark and National is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and National CineMedia go up and down completely randomly.
Pair Corralation between PennantPark Floating and National CineMedia
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.19 times more return on investment than National CineMedia. However, PennantPark Floating Rate is 5.21 times less risky than National CineMedia. It trades about 0.47 of its potential returns per unit of risk. National CineMedia is currently generating about 0.07 per unit of risk. If you would invest 1,062 in PennantPark Floating Rate on October 23, 2024 and sell it today you would earn a total of 55.00 from holding PennantPark Floating Rate or generate 5.18% 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. National CineMedia
Performance |
| Timeline |
| PennantPark Floating Rate |
| National CineMedia |
PennantPark Floating and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and National CineMedia
The main advantage of trading using opposite PennantPark Floating and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia'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 |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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