Correlation Between PennantPark Floating and Meiwu Technology

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

Diversification Opportunities for PennantPark Floating and Meiwu Technology

-0.73

Correlation Coefficient

PennantPark Floating  Meiwu Technology

Pay attention - limited upside

The 3 months correlation between PennantPark and Meiwu is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology 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 Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Meiwu Technology go up and down completely randomly.

Pair Corralation between PennantPark Floating and Meiwu Technology

Given the investment horizon of 90 days PennantPark Floating Rate is expected to generate 0.06 times more return on investment than Meiwu Technology. However, PennantPark Floating Rate is 16.34 times less risky than Meiwu Technology. It trades about 0.12 of its potential returns per unit of risk. Meiwu Technology Co is currently generating about -0.21 per unit of risk. If you would invest  1,056  in PennantPark Floating Rate on December 29, 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	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

PennantPark Floating Rate  vs.  Meiwu Technology Co

PennantPark Floating Rate

Risk-Adjusted Performance

Good

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.

Meiwu Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meiwu Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with PennantPark Floating and Meiwu Technology

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

The idea behind PennantPark Floating Rate and Meiwu Technology Co 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.