Correlation Between PennantPark Floating and WELLS
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By analyzing existing cross correlation between PennantPark Floating Rate and WELLS FARGO NEW, you can compare the effects of market volatilities on PennantPark Floating and WELLS 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 WELLS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and WELLS.
Diversification Opportunities for PennantPark Floating and WELLS
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and WELLS is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and WELLS FARGO NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WELLS FARGO NEW 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 WELLS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WELLS FARGO NEW has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and WELLS go up and down completely randomly.
Pair Corralation between PennantPark Floating and WELLS
Given the investment horizon of 90 days PennantPark Floating is expected to generate 13.2 times less return on investment than WELLS. But when comparing it to its historical volatility, PennantPark Floating Rate is 2.05 times less risky than WELLS. It trades about 0.02 of its potential returns per unit of risk. WELLS FARGO NEW is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 9,627 in WELLS FARGO NEW on September 1, 2024 and sell it today you would earn a total of 389.00 from holding WELLS FARGO NEW or generate 4.04% 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. WELLS FARGO NEW
Performance |
| Timeline |
| PennantPark Floating Rate |
| WELLS FARGO NEW |
PennantPark Floating and WELLS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and WELLS
The main advantage of trading using opposite PennantPark Floating and WELLS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, WELLS 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 WELLS will offset losses from the drop in WELLS'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 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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