Correlation Between PennantPark Floating and 05565QDM7
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By analyzing existing cross correlation between PennantPark Floating Rate and BP CAP MKTS, you can compare the effects of market volatilities on PennantPark Floating and 05565QDM7 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 05565QDM7. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and 05565QDM7.
Diversification Opportunities for PennantPark Floating and 05565QDM7
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PennantPark and 05565QDM7 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and BP CAP MKTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP CAP MKTS 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 05565QDM7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP CAP MKTS has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and 05565QDM7 go up and down completely randomly.
Pair Corralation between PennantPark Floating and 05565QDM7
Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.39 times more return on investment than 05565QDM7. However, PennantPark Floating Rate is 2.56 times less risky than 05565QDM7. It trades about 0.11 of its potential returns per unit of risk. BP CAP MKTS is currently generating about -0.22 per unit of risk. If you would invest 1,100 in PennantPark Floating Rate on September 2, 2024 and sell it today you would earn a total of 16.00 from holding PennantPark Floating Rate or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
PennantPark Floating Rate vs. BP CAP MKTS
Performance |
| Timeline |
| PennantPark Floating Rate |
| BP CAP MKTS |
PennantPark Floating and 05565QDM7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and 05565QDM7
The main advantage of trading using opposite PennantPark Floating and 05565QDM7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, 05565QDM7 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 05565QDM7 will offset losses from the drop in 05565QDM7's long position.| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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