Correlation Between PennantPark Floating and Federated Premier
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Federated Premier 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 Federated Premier 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 Federated Premier Municipal, you can compare the effects of market volatilities on PennantPark Floating and Federated Premier 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 Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Federated Premier.
Diversification Opportunities for PennantPark Floating and Federated Premier
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and Federated is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier 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 Federated Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Premier has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Federated Premier go up and down completely randomly.
Pair Corralation between PennantPark Floating and Federated Premier
Given the investment horizon of 90 days PennantPark Floating is expected to generate 1.13 times less return on investment than Federated Premier. In addition to that, PennantPark Floating is 1.88 times more volatile than Federated Premier Municipal. It trades about 0.1 of its total potential returns per unit of risk. Federated Premier Municipal is currently generating about 0.22 per unit of volatility. If you would invest 1,106 in Federated Premier Municipal on December 2, 2024 and sell it today you would earn a total of 28.00 from holding Federated Premier Municipal or generate 2.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PennantPark Floating Rate vs. Federated Premier Municipal
Performance |
Timeline |
PennantPark Floating Rate |
Federated Premier |
PennantPark Floating and Federated Premier Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PennantPark Floating and Federated Premier
The main advantage of trading using opposite PennantPark Floating and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Federated Premier 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 Federated Premier will offset losses from the drop in Federated Premier's long position.PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Equity Valuation Check real value of public entities based on technical and fundamental data |