Correlation Between PennantPark Floating and NETGEAR
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and NETGEAR 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 NETGEAR 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 NETGEAR, you can compare the effects of market volatilities on PennantPark Floating and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and NETGEAR.
Diversification Opportunities for PennantPark Floating and NETGEAR
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PennantPark and NETGEAR is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and NETGEAR go up and down completely randomly.
Pair Corralation between PennantPark Floating and NETGEAR
Given the investment horizon of 90 days PennantPark Floating Rate is expected to under-perform the NETGEAR. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Floating Rate is 2.38 times less risky than NETGEAR. The stock trades about -0.14 of its potential returns per unit of risk. The NETGEAR is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 2,022 in NETGEAR on August 26, 2024 and sell it today you would earn a total of 408.00 from holding NETGEAR or generate 20.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. NETGEAR
Performance |
| Timeline |
| PennantPark Floating Rate |
| NETGEAR |
PennantPark Floating and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and NETGEAR
The main advantage of trading using opposite PennantPark Floating and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.| PennantPark Floating vs. PowerUp Acquisition Corp | PennantPark Floating vs. Aurora Innovation | PennantPark Floating vs. HUMANA INC | PennantPark Floating vs. Aquagold International |
| NETGEAR vs. KVH Industries | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks | NETGEAR vs. Mynaric AG ADR |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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