Correlation Between PennantPark Floating and 573874AC8

Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and 573874AC8 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 573874AC8 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 MRVL 165 15 APR 26, you can compare the effects of market volatilities on PennantPark Floating and 573874AC8 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 573874AC8. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and 573874AC8.

Diversification Opportunities for PennantPark Floating and 573874AC8

0.25

Correlation Coefficient

PennantPark Floating  573874AC8

Modest diversification

The 3 months correlation between PennantPark and 573874AC8 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and MRVL 165 15 APR 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRVL 165 15 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 573874AC8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRVL 165 15 has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and 573874AC8 go up and down completely randomly.

Pair Corralation between PennantPark Floating and 573874AC8

Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 1.06 times more return on investment than 573874AC8. However, PennantPark Floating is 1.06 times more volatile than MRVL 165 15 APR 26. It trades about -0.02 of its potential returns per unit of risk. MRVL 165 15 APR 26 is currently generating about -0.16 per unit of risk. If you would invest  1,122  in PennantPark Floating Rate on September 12, 2024 and sell it today you would lose (17.00) from holding PennantPark Floating Rate or give up 1.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

PennantPark Floating Rate  vs.  MRVL 165 15 APR 26

PennantPark Floating Rate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PennantPark Floating Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, PennantPark Floating is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

MRVL 165 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MRVL 165 15 APR 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MRVL 165 15 APR 26 investors.

Pair Trading with PennantPark Floating and 573874AC8

The main advantage of trading using opposite PennantPark Floating and 573874AC8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, 573874AC8 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 573874AC8 will offset losses from the drop in 573874AC8's long position.

The idea behind PennantPark Floating Rate and MRVL 165 15 APR 26 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.