Correlation Between PennantPark Floating and Q2 Holdings
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Q2 Holdings 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 Q2 Holdings 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 Q2 Holdings, you can compare the effects of market volatilities on PennantPark Floating and Q2 Holdings 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 Q2 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Q2 Holdings.
Diversification Opportunities for PennantPark Floating and Q2 Holdings
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and QTWO is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Q2 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q2 Holdings 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 Q2 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q2 Holdings has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Q2 Holdings go up and down completely randomly.
Pair Corralation between PennantPark Floating and Q2 Holdings
Given the investment horizon of 90 days PennantPark Floating is expected to generate 6.58 times less return on investment than Q2 Holdings. But when comparing it to its historical volatility, PennantPark Floating Rate is 2.18 times less risky than Q2 Holdings. It trades about 0.04 of its potential returns per unit of risk. Q2 Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,705 in Q2 Holdings on September 2, 2024 and sell it today you would earn a total of 7,769 from holding Q2 Holdings or generate 287.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Q2 Holdings
Performance |
| Timeline |
| PennantPark Floating Rate |
| Q2 Holdings |
PennantPark Floating and Q2 Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Q2 Holdings
The main advantage of trading using opposite PennantPark Floating and Q2 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Q2 Holdings 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 Q2 Holdings will offset losses from the drop in Q2 Holdings' long position.| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
| Q2 Holdings vs. PROS Holdings | Q2 Holdings vs. Meridianlink | Q2 Holdings vs. Enfusion | Q2 Holdings vs. Paylocity Holdng |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |