Correlation Between PennantPark Investment and Golub Capital
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Golub Capital 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 Investment and Golub Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Golub Capital BDC, you can compare the effects of market volatilities on PennantPark Investment and Golub Capital 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 Investment with a short position of Golub Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Golub Capital.
Diversification Opportunities for PennantPark Investment and Golub Capital
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PennantPark and Golub is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Golub Capital BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golub Capital BDC and PennantPark Investment 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 Investment are associated (or correlated) with Golub Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golub Capital BDC has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Golub Capital go up and down completely randomly.
Pair Corralation between PennantPark Investment and Golub Capital
Given the investment horizon of 90 days PennantPark Investment is expected to generate 1.33 times more return on investment than Golub Capital. However, PennantPark Investment is 1.33 times more volatile than Golub Capital BDC. It trades about 0.03 of its potential returns per unit of risk. Golub Capital BDC is currently generating about -0.07 per unit of risk. If you would invest 690.00 in PennantPark Investment on August 24, 2024 and sell it today you would earn a total of 4.00 from holding PennantPark Investment or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Golub Capital BDC
Performance |
| Timeline |
| PennantPark Investment |
| Golub Capital BDC |
PennantPark Investment and Golub Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Golub Capital
The main advantage of trading using opposite PennantPark Investment and Golub Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Golub Capital 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 Golub Capital will offset losses from the drop in Golub Capital's long position.| PennantPark Investment vs. Sixth Street Specialty | PennantPark Investment vs. New Mountain Finance | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. BlackRock TCP Capital |
| Golub Capital vs. BlackRock TCP Capital | Golub Capital vs. Carlyle Secured Lending | Golub Capital vs. Triplepoint Venture Growth | Golub Capital vs. New Mountain Finance |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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