Correlation Between PennantPark Floating and U Haul
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and U Haul 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 U Haul 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 U Haul Holding, you can compare the effects of market volatilities on PennantPark Floating and U Haul 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 U Haul. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and U Haul.
Diversification Opportunities for PennantPark Floating and U Haul
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and UHAL is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and U Haul Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Haul Holding 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 U Haul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Haul Holding has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and U Haul go up and down completely randomly.
Pair Corralation between PennantPark Floating and U Haul
Given the investment horizon of 90 days PennantPark Floating is expected to generate 2.93 times less return on investment than U Haul. But when comparing it to its historical volatility, PennantPark Floating Rate is 1.73 times less risky than U Haul. It trades about 0.03 of its potential returns per unit of risk. U Haul Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,421 in U Haul Holding on September 1, 2024 and sell it today you would earn a total of 646.00 from holding U Haul Holding or generate 10.06% 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. U Haul Holding
Performance |
| Timeline |
| PennantPark Floating Rate |
| U Haul Holding |
PennantPark Floating and U Haul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and U Haul
The main advantage of trading using opposite PennantPark Floating and U Haul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, U Haul 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 U Haul will offset losses from the drop in U Haul's long position.| PennantPark Floating vs. Visa Class A | PennantPark Floating vs. Diamond Hill Investment | PennantPark Floating vs. Distoken Acquisition | PennantPark Floating vs. Associated Capital Group |
| U Haul vs. Air Lease | U Haul vs. HE Equipment Services | U Haul vs. GATX Corporation | U Haul vs. Custom Truck One |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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