Correlation Between PennantPark Floating and Chicago Atlantic
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Chicago Atlantic 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 Chicago Atlantic 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 Chicago Atlantic BDC,, you can compare the effects of market volatilities on PennantPark Floating and Chicago Atlantic 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 Chicago Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Chicago Atlantic.
Diversification Opportunities for PennantPark Floating and Chicago Atlantic
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between PennantPark and Chicago is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Chicago Atlantic BDC, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicago Atlantic BDC, 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 Chicago Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicago Atlantic BDC, has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Chicago Atlantic go up and down completely randomly.
Pair Corralation between PennantPark Floating and Chicago Atlantic
Given the investment horizon of 90 days PennantPark Floating Rate is expected to under-perform the Chicago Atlantic. But the stock apears to be less risky and, when comparing its historical volatility, PennantPark Floating Rate is 1.72 times less risky than Chicago Atlantic. The stock trades about -0.14 of its potential returns per unit of risk. The Chicago Atlantic BDC, is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,239 in Chicago Atlantic BDC, on September 24, 2024 and sell it today you would lose (4.00) from holding Chicago Atlantic BDC, or give up 0.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PennantPark Floating Rate vs. Chicago Atlantic BDC,
Performance |
Timeline |
PennantPark Floating Rate |
Chicago Atlantic BDC, |
PennantPark Floating and Chicago Atlantic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PennantPark Floating and Chicago Atlantic
The main advantage of trading using opposite PennantPark Floating and Chicago Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Chicago Atlantic 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 Chicago Atlantic will offset losses from the drop in Chicago Atlantic's long position.PennantPark Floating vs. Aquagold International | PennantPark Floating vs. Morningstar Unconstrained Allocation | PennantPark Floating vs. Thrivent High Yield | PennantPark Floating vs. Via Renewables |
Chicago Atlantic vs. KeyCorp | Chicago Atlantic vs. PennantPark Floating Rate | Chicago Atlantic vs. Microbot Medical | Chicago Atlantic vs. Merit Medical Systems |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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