Correlation Between PennantPark Floating and Latamgrowth SPAC

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

Diversification Opportunities for PennantPark Floating and Latamgrowth SPAC

-0.07

Correlation Coefficient

PennantPark Floating  Latamgrowth SPAC

Good diversification

The 3 months correlation between PennantPark and Latamgrowth is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Latamgrowth SPAC Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latamgrowth SPAC Unit 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 Latamgrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latamgrowth SPAC Unit has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Latamgrowth SPAC go up and down completely randomly.

Pair Corralation between PennantPark Floating and Latamgrowth SPAC

Given the investment horizon of 90 days PennantPark Floating is expected to generate 6.64 times less return on investment than Latamgrowth SPAC. But when comparing it to its historical volatility, PennantPark Floating Rate is 6.89 times less risky than Latamgrowth SPAC. It trades about 0.02 of its potential returns per unit of risk. Latamgrowth SPAC Unit is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,156  in Latamgrowth SPAC Unit on October 26, 2024 and sell it today you would lose (11.00) from holding Latamgrowth SPAC Unit or give up 0.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.22%
Values	Daily Returns

PennantPark Floating Rate  vs.  Latamgrowth SPAC Unit

PennantPark Floating Rate

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Floating Rate are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, PennantPark Floating is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Latamgrowth SPAC Unit

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Latamgrowth SPAC Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively unsteady technical and fundamental indicators, Latamgrowth SPAC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PennantPark Floating and Latamgrowth SPAC

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

The idea behind PennantPark Floating Rate and Latamgrowth SPAC Unit 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.