Correlation Between Zedge and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Zedge 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 Zedge and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zedge Inc and PennantPark Floating Rate, you can compare the effects of market volatilities on Zedge 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 Zedge with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zedge and PennantPark Floating.
Diversification Opportunities for Zedge and PennantPark Floating
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zedge and PennantPark is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Zedge Inc 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 Zedge 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 Zedge Inc 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 Zedge i.e., Zedge and PennantPark Floating go up and down completely randomly.
Pair Corralation between Zedge and PennantPark Floating
Given the investment horizon of 90 days Zedge Inc is expected to generate 3.7 times more return on investment than PennantPark Floating. However, Zedge is 3.7 times more volatile than PennantPark Floating Rate. It trades about 0.03 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.04 per unit of risk. If you would invest 234.00 in Zedge Inc on August 30, 2024 and sell it today you would earn a total of 37.00 from holding Zedge Inc or generate 15.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zedge Inc vs. PennantPark Floating Rate
Performance |
| Timeline |
| Zedge Inc |
| PennantPark Floating Rate |
Zedge and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zedge and PennantPark Floating
The main advantage of trading using opposite Zedge and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zedge 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.The idea behind Zedge Inc and PennantPark Floating Rate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PennantPark Floating vs. TPG Inc | PennantPark Floating vs. Carlyle Secured Lending | PennantPark Floating vs. Brookfield 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |