Correlation Between PennantPark Floating and XCHG Limited
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and XCHG Limited 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 XCHG Limited 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 XCHG Limited American, you can compare the effects of market volatilities on PennantPark Floating and XCHG Limited 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 XCHG Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and XCHG Limited.
Diversification Opportunities for PennantPark Floating and XCHG Limited
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and XCHG is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and XCHG Limited American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCHG Limited American 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 XCHG Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCHG Limited American has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and XCHG Limited go up and down completely randomly.
Pair Corralation between PennantPark Floating and XCHG Limited
Given the investment horizon of 90 days PennantPark Floating is expected to generate 753.72 times less return on investment than XCHG Limited. But when comparing it to its historical volatility, PennantPark Floating Rate is 142.56 times less risky than XCHG Limited. It trades about 0.03 of its potential returns per unit of risk. XCHG Limited American is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.00 in XCHG Limited American on September 12, 2024 and sell it today you would earn a total of 1,877 from holding XCHG Limited American or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 27.02% |
| Values | Daily Returns |
PennantPark Floating Rate vs. XCHG Limited American
Performance |
| Timeline |
| PennantPark Floating Rate |
| XCHG Limited American |
PennantPark Floating and XCHG Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and XCHG Limited
The main advantage of trading using opposite PennantPark Floating and XCHG Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, XCHG Limited 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 XCHG Limited will offset losses from the drop in XCHG Limited's long position.| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital | PennantPark Floating vs. Gladstone Capital |
| XCHG Limited vs. GE Vernova LLC | XCHG Limited vs. Modine Manufacturing | XCHG Limited vs. American Axle Manufacturing | XCHG Limited vs. Magna International |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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