Correlation Between PennantPark Floating and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment, you can compare the effects of market volatilities on PennantPark Floating and PennantPark Investment 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 PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and PennantPark Investment.
Diversification Opportunities for PennantPark Floating and PennantPark Investment
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and PennantPark is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment 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 PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and PennantPark Investment go up and down completely randomly.
Pair Corralation between PennantPark Floating and PennantPark Investment
Given the investment horizon of 90 days PennantPark Floating is expected to generate 2.53 times less return on investment than PennantPark Investment. But when comparing it to its historical volatility, PennantPark Floating Rate is 1.19 times less risky than PennantPark Investment. It trades about 0.06 of its potential returns per unit of risk. PennantPark Investment is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 397.00 in PennantPark Investment on August 27, 2024 and sell it today you would earn a total of 301.00 from holding PennantPark Investment or generate 75.82% 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. PennantPark Investment
Performance |
| Timeline |
| PennantPark Floating Rate |
| PennantPark Investment |
PennantPark Floating and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and PennantPark Investment
The main advantage of trading using opposite PennantPark Floating and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| PennantPark Floating vs. PowerUp Acquisition Corp | PennantPark Floating vs. Aurora Innovation | PennantPark Floating vs. HUMANA INC | PennantPark Floating vs. Aquagold International |
| PennantPark Investment vs. PowerUp Acquisition Corp | PennantPark Investment vs. Aurora Innovation | PennantPark Investment vs. HUMANA INC | PennantPark Investment vs. Aquagold 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |