Correlation Between PennantPark Floating and Patria Latin
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Patria Latin 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 Patria Latin 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 Patria Latin American, you can compare the effects of market volatilities on PennantPark Floating and Patria Latin 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 Patria Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Patria Latin.
Diversification Opportunities for PennantPark Floating and Patria Latin
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and Patria is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Patria Latin American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patria Latin 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 Patria Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patria Latin American has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Patria Latin go up and down completely randomly.
Pair Corralation between PennantPark Floating and Patria Latin
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 11.15 times more return on investment than Patria Latin. However, PennantPark Floating is 11.15 times more volatile than Patria Latin American. It trades about 0.16 of its potential returns per unit of risk. Patria Latin American is currently generating about 0.28 per unit of risk. If you would invest 1,089 in PennantPark Floating Rate on November 3, 2024 and sell it today you would earn a total of 31.00 from holding PennantPark Floating Rate or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Patria Latin American
Performance |
| Timeline |
| PennantPark Floating Rate |
| Patria Latin American |
PennantPark Floating and Patria Latin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Patria Latin
The main advantage of trading using opposite PennantPark Floating and Patria Latin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Patria Latin 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 Patria Latin will offset losses from the drop in Patria Latin'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 |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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