Correlation Between PennantPark Floating and Regions Financial
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Regions Financial 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 Regions Financial 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 Regions Financial, you can compare the effects of market volatilities on PennantPark Floating and Regions Financial 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Regions Financial.
Diversification Opportunities for PennantPark Floating and Regions Financial
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and Regions is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Regions Financial go up and down completely randomly.
Pair Corralation between PennantPark Floating and Regions Financial
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.61 times more return on investment than Regions Financial. However, PennantPark Floating Rate is 1.63 times less risky than Regions Financial. It trades about 0.06 of its potential returns per unit of risk. Regions Financial is currently generating about 0.03 per unit of risk. If you would invest 1,090 in PennantPark Floating Rate on September 4, 2024 and sell it today you would earn a total of 9.00 from holding PennantPark Floating Rate or generate 0.83% 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. Regions Financial
Performance |
| Timeline |
| PennantPark Floating Rate |
| Regions Financial |
PennantPark Floating and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Regions Financial
The main advantage of trading using opposite PennantPark Floating and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial's long position.| PennantPark Floating vs. Visa Class A | PennantPark Floating vs. Diamond Hill Investment | PennantPark Floating vs. Associated Capital Group | PennantPark Floating vs. Brookfield Corp |
| Regions Financial vs. Olympic Steel | Regions Financial vs. 51Talk Online Education | Regions Financial vs. Allegheny Technologies Incorporated | Regions Financial vs. Afya |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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