Correlation Between PennantPark Floating and SLR Investment
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and SLR 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 SLR 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 SLR Investment Corp, you can compare the effects of market volatilities on PennantPark Floating and SLR 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and SLR Investment.
Diversification Opportunities for PennantPark Floating and SLR Investment
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and SLR is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and SLR Investment go up and down completely randomly.
Pair Corralation between PennantPark Floating and SLR Investment
Given the investment horizon of 90 days PennantPark Floating Rate is expected to under-perform the SLR Investment. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Floating Rate is 1.39 times less risky than SLR Investment. The stock trades about -0.16 of its potential returns per unit of risk. The SLR Investment Corp is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,557 in SLR Investment Corp on August 29, 2024 and sell it today you would earn a total of 98.00 from holding SLR Investment Corp or generate 6.29% 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. SLR Investment Corp
Performance |
| Timeline |
| PennantPark Floating Rate |
| SLR Investment Corp |
PennantPark Floating and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and SLR Investment
The main advantage of trading using opposite PennantPark Floating and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, SLR 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| PennantPark Floating vs. Aurora Innovation | PennantPark Floating vs. HUMANA INC | PennantPark Floating vs. Aquagold International | PennantPark Floating vs. Barloworld Ltd ADR |
| SLR Investment vs. Horizon Technology Finance | SLR Investment vs. WhiteHorse Finance | SLR Investment vs. Gladstone Capital | SLR Investment vs. PennantPark Floating Rate |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |