Correlation Between Boston Beer and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Boston Beer and PennantPark Floating 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 Boston Beer and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and PennantPark Floating Rate, you can compare the effects of market volatilities on Boston Beer and PennantPark Floating 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 Boston Beer with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and PennantPark Floating.
Diversification Opportunities for Boston Beer and PennantPark Floating
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boston and PennantPark is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate and Boston Beer 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 Boston Beer are associated (or correlated) with PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of Boston Beer i.e., Boston Beer and PennantPark Floating go up and down completely randomly.
Pair Corralation between Boston Beer and PennantPark Floating
Considering the 90-day investment horizon Boston Beer is expected to generate 1.87 times more return on investment than PennantPark Floating. However, Boston Beer is 1.87 times more volatile than PennantPark Floating Rate. It trades about 0.29 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.11 per unit of risk. If you would invest 29,494 in Boston Beer on September 2, 2024 and sell it today you would earn a total of 2,130 from holding Boston Beer or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. PennantPark Floating Rate
Performance |
| Timeline |
| Boston Beer |
| PennantPark Floating Rate |
Boston Beer and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and PennantPark Floating
The main advantage of trading using opposite Boston Beer and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer position performs unexpectedly, PennantPark Floating 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 PennantPark Floating will offset losses from the drop in PennantPark Floating's long position.| Boston Beer vs. Compania Cervecerias Unidas | Boston Beer vs. Molson Coors Brewing | Boston Beer vs. Suntory Beverage Food | Boston Beer vs. Carlsberg AS |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |