Correlation Between PennantPark Floating and SEI Investments
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and SEI Investments 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 SEI Investments 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 SEI Investments, you can compare the effects of market volatilities on PennantPark Floating and SEI Investments 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 SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and SEI Investments.
Diversification Opportunities for PennantPark Floating and SEI Investments
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and SEI is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments 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 SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and SEI Investments go up and down completely randomly.
Pair Corralation between PennantPark Floating and SEI Investments
Given the investment horizon of 90 days PennantPark Floating is expected to generate 3.19 times less return on investment than SEI Investments. But when comparing it to its historical volatility, PennantPark Floating Rate is 1.29 times less risky than SEI Investments. It trades about 0.05 of its potential returns per unit of risk. SEI Investments is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,706 in SEI Investments on August 25, 2024 and sell it today you would earn a total of 2,376 from holding SEI Investments or generate 41.64% 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. SEI Investments
Performance |
| Timeline |
| PennantPark Floating Rate |
| SEI Investments |
PennantPark Floating and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and SEI Investments
The main advantage of trading using opposite PennantPark Floating and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, SEI Investments 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 SEI Investments will offset losses from the drop in SEI Investments' long position.| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
| SEI Investments vs. PowerUp Acquisition Corp | SEI Investments vs. Aurora Innovation | SEI Investments vs. HUMANA INC | SEI Investments 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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