Correlation Between Talen Energy and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Talen Energy 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 Talen Energy and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Talen Energy and PennantPark Floating Rate, you can compare the effects of market volatilities on Talen Energy 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 Talen Energy with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talen Energy and PennantPark Floating.
Diversification Opportunities for Talen Energy and PennantPark Floating
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Talen and PennantPark is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Talen Energy 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 Talen Energy 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 Talen Energy 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 Talen Energy i.e., Talen Energy and PennantPark Floating go up and down completely randomly.
Pair Corralation between Talen Energy and PennantPark Floating
Considering the 90-day investment horizon Talen Energy is expected to generate 1.66 times more return on investment than PennantPark Floating. However, Talen Energy is 1.66 times more volatile than PennantPark Floating Rate. It trades about -0.01 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about -0.2 per unit of risk. If you would invest 20,700 in Talen Energy on January 15, 2025 and sell it today you would lose (677.00) from holding Talen Energy or give up 3.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Talen Energy vs. PennantPark Floating Rate
Performance |
| Timeline |
| Talen Energy |
| PennantPark Floating Rate |
Talen Energy and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Talen Energy and PennantPark Floating
The main advantage of trading using opposite Talen Energy and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talen Energy 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.| Talen Energy vs. Arrow Electronics | Talen Energy vs. ServiceNow | Talen Energy vs. BioNTech SE | Talen Energy vs. Canlan Ice Sports |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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