Correlation Between Carlyle Secured and PennantPark Floating

Can any of the company-specific risk be diversified away by investing in both Carlyle Secured 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 Carlyle Secured and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carlyle Secured Lending and PennantPark Floating Rate, you can compare the effects of market volatilities on Carlyle Secured 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 Carlyle Secured with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle Secured and PennantPark Floating.

Diversification Opportunities for Carlyle Secured and PennantPark Floating

-0.34

Correlation Coefficient

Carlyle Secured  PennantPark Floating

Very good diversification

The 3 months correlation between Carlyle and PennantPark is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Secured Lending 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 Carlyle Secured 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 Carlyle Secured Lending 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 Carlyle Secured i.e., Carlyle Secured and PennantPark Floating go up and down completely randomly.

Pair Corralation between Carlyle Secured and PennantPark Floating

Given the investment horizon of 90 days Carlyle Secured Lending is expected to under-perform the PennantPark Floating. In addition to that, Carlyle Secured is 1.33 times more volatile than PennantPark Floating Rate. It trades about -0.05 of its total potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.11 per unit of volatility. If you would invest  1,063  in PennantPark Floating Rate on December 31, 2024 and sell it today you would earn a total of  65.00  from holding PennantPark Floating Rate or generate 6.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Carlyle Secured Lending  vs.  PennantPark Floating Rate

Carlyle Secured Lending

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carlyle Secured Lending has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Carlyle Secured is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

PennantPark Floating Rate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Floating Rate are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, PennantPark Floating may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Carlyle Secured and PennantPark Floating

The main advantage of trading using opposite Carlyle Secured and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle Secured 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 Carlyle Secured Lending 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.