Correlation Between PennantPark Floating and NIP Group
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and NIP Group 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 NIP Group 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 NIP Group American, you can compare the effects of market volatilities on PennantPark Floating and NIP Group 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 NIP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and NIP Group.
Diversification Opportunities for PennantPark Floating and NIP Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and NIP is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and NIP Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIP Group American 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 NIP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIP Group American has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and NIP Group go up and down completely randomly.
Pair Corralation between PennantPark Floating and NIP Group
Given the investment horizon of 90 days PennantPark Floating is expected to generate 66.73 times less return on investment than NIP Group. But when comparing it to its historical volatility, PennantPark Floating Rate is 4.52 times less risky than NIP Group. It trades about 0.03 of its potential returns per unit of risk. NIP Group American is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 585.00 in NIP Group American on September 15, 2024 and sell it today you would earn a total of 125.00 from holding NIP Group American or generate 21.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. NIP Group American
Performance |
| Timeline |
| PennantPark Floating Rate |
| NIP Group American |
PennantPark Floating and NIP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and NIP Group
The main advantage of trading using opposite PennantPark Floating and NIP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, NIP Group 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 NIP Group will offset losses from the drop in NIP Group's long position.| PennantPark Floating vs. Visa Class A | PennantPark Floating vs. Diamond Hill Investment | PennantPark Floating vs. Distoken Acquisition | PennantPark Floating vs. AllianceBernstein Holding LP |
| NIP Group vs. Mill City Ventures | NIP Group vs. Pintec Technology Holdings | NIP Group vs. Harmony Gold Mining | NIP Group vs. PennantPark Floating Rate |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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