Correlation Between Turning Point and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Turning Point 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 Turning Point and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and PennantPark Floating Rate, you can compare the effects of market volatilities on Turning Point 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 Turning Point with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and PennantPark Floating.
Diversification Opportunities for Turning Point and PennantPark Floating
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Turning and PennantPark is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands 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 Turning Point 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 Turning Point Brands 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 Turning Point i.e., Turning Point and PennantPark Floating go up and down completely randomly.
Pair Corralation between Turning Point and PennantPark Floating
Considering the 90-day investment horizon Turning Point Brands is expected to generate 1.94 times more return on investment than PennantPark Floating. However, Turning Point is 1.94 times more volatile than PennantPark Floating Rate. It trades about 0.12 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.06 per unit of risk. If you would invest 2,345 in Turning Point Brands on November 19, 2024 and sell it today you would earn a total of 4,618 from holding Turning Point Brands or generate 196.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turning Point Brands vs. PennantPark Floating Rate
Performance |
| Timeline |
| Turning Point Brands |
| PennantPark Floating Rate |
Turning Point and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and PennantPark Floating
The main advantage of trading using opposite Turning Point and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point 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.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| PennantPark Floating vs. Horizon Space Acquisition | PennantPark Floating vs. Erayak Power Solution | PennantPark Floating vs. AlphaTime Acquisition Corp | PennantPark Floating vs. Israel Acquisitions Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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