Correlation Between PennantPark Floating and Nextnav Acquisition
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Nextnav Acquisition 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 Nextnav Acquisition 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 Nextnav Acquisition Corp, you can compare the effects of market volatilities on PennantPark Floating and Nextnav Acquisition 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 Nextnav Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Nextnav Acquisition.
Diversification Opportunities for PennantPark Floating and Nextnav Acquisition
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PennantPark and Nextnav is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Nextnav Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextnav Acquisition Corp 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 Nextnav Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextnav Acquisition Corp has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Nextnav Acquisition go up and down completely randomly.
Pair Corralation between PennantPark Floating and Nextnav Acquisition
Given the investment horizon of 90 days PennantPark Floating is expected to generate 9.28 times less return on investment than Nextnav Acquisition. But when comparing it to its historical volatility, PennantPark Floating Rate is 5.25 times less risky than Nextnav Acquisition. It trades about 0.07 of its potential returns per unit of risk. Nextnav Acquisition Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 386.00 in Nextnav Acquisition Corp on September 12, 2024 and sell it today you would earn a total of 1,328 from holding Nextnav Acquisition Corp or generate 344.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Nextnav Acquisition Corp
Performance |
| Timeline |
| PennantPark Floating Rate |
| Nextnav Acquisition Corp |
PennantPark Floating and Nextnav Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Nextnav Acquisition
The main advantage of trading using opposite PennantPark Floating and Nextnav Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Nextnav Acquisition 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 Nextnav Acquisition will offset losses from the drop in Nextnav Acquisition's long position.| PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital | PennantPark Floating vs. Gladstone Capital | PennantPark Floating vs. Main Street Capital |
| Nextnav Acquisition vs. NetScout Systems | Nextnav Acquisition vs. Priority Technology Holdings | Nextnav Acquisition vs. OneSpan | Nextnav Acquisition vs. Consensus Cloud Solutions |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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