Correlation Between PennantPark Floating and Chiba Bank

Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Chiba Bank 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 Chiba Bank 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 Chiba Bank Ltd, you can compare the effects of market volatilities on PennantPark Floating and Chiba Bank 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 Chiba Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Chiba Bank.

Diversification Opportunities for PennantPark Floating and Chiba Bank

0.0

Correlation Coefficient

PennantPark Floating  Chiba Bank

Pay attention - limited upside

The 3 months correlation between PennantPark and Chiba is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Chiba Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiba Bank 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 Chiba Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiba Bank has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Chiba Bank go up and down completely randomly.

Pair Corralation between PennantPark Floating and Chiba Bank

If you would invest  1,056  in PennantPark Floating Rate on December 30, 2024 and sell it today you would earn a total of  72.00  from holding PennantPark Floating Rate or generate 6.82% return on investment over 90 days.

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

PennantPark Floating Rate  vs.  Chiba Bank Ltd

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 9 (%) 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 April 2025.

Chiba Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chiba Bank Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Chiba Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PennantPark Floating and Chiba Bank

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

The idea behind PennantPark Floating Rate and Chiba Bank Ltd 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.