Correlation Between PennantPark Floating and Thor Industries
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Thor Industries 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 Thor Industries 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 Thor Industries, you can compare the effects of market volatilities on PennantPark Floating and Thor Industries 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 Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Thor Industries.
Diversification Opportunities for PennantPark Floating and Thor Industries
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between PennantPark and Thor is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Thor Industries go up and down completely randomly.
Pair Corralation between PennantPark Floating and Thor Industries
Given the investment horizon of 90 days PennantPark Floating is expected to generate 1.96 times less return on investment than Thor Industries. But when comparing it to its historical volatility, PennantPark Floating Rate is 2.42 times less risky than Thor Industries. It trades about 0.06 of its potential returns per unit of risk. Thor Industries is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,787 in Thor Industries on August 31, 2024 and sell it today you would earn a total of 3,326 from holding Thor Industries or generate 42.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Thor Industries
Performance |
| Timeline |
| PennantPark Floating Rate |
| Thor Industries |
PennantPark Floating and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Thor Industries
The main advantage of trading using opposite PennantPark Floating and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' long position.| PennantPark Floating vs. Ares Capital | PennantPark Floating vs. Hercules Capital | PennantPark Floating vs. Main Street Capital |
| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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