Correlation Between PennantPark Floating and Bio Meat

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

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

Diversification Opportunities for PennantPark Floating and Bio Meat

-0.76

Correlation Coefficient

PennantPark Floating  Bio Meat

Pay attention - limited upside

The 3 months correlation between PennantPark and Bio is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Bio Meat Foodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Meat Foodtech and PennantPark Floating 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 PennantPark Floating Rate are associated (or correlated) with Bio Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Meat Foodtech has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Bio Meat go up and down completely randomly.

Pair Corralation between PennantPark Floating and Bio Meat

Assuming the 90 days trading horizon PennantPark Floating Rate is expected to generate 3.19 times more return on investment than Bio Meat. However, PennantPark Floating is 3.19 times more volatile than Bio Meat Foodtech. It trades about 0.24 of its potential returns per unit of risk. Bio Meat Foodtech is currently generating about 0.0 per unit of risk. If you would invest  3,148  in PennantPark Floating Rate on September 1, 2024 and sell it today you would earn a total of  1,025  from holding PennantPark Floating Rate or generate 32.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

PennantPark Floating Rate  vs.  Bio Meat Foodtech

PennantPark Floating Rate

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Floating Rate are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PennantPark Floating sustained solid returns over the last few months and may actually be approaching a breakup point.

Bio Meat Foodtech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio Meat Foodtech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with PennantPark Floating and Bio Meat

The main advantage of trading using opposite PennantPark Floating and Bio Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Bio Meat 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 Bio Meat will offset losses from the drop in Bio Meat's long position.

The idea behind PennantPark Floating Rate and Bio Meat Foodtech 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.