Correlation Between MARATHON and PennantPark Floating

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Can any of the company-specific risk be diversified away by investing in both MARATHON and PennantPark Floating 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 MARATHON and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MARATHON PETE P and PennantPark Floating Rate, you can compare the effects of market volatilities on MARATHON and PennantPark Floating 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 MARATHON with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of MARATHON and PennantPark Floating.

Diversification Opportunities for MARATHON and PennantPark Floating

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between MARATHON and PennantPark is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding MARATHON PETE P and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate and MARATHON 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 MARATHON PETE P are associated (or correlated) with PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of MARATHON i.e., MARATHON and PennantPark Floating go up and down completely randomly.

Pair Corralation between MARATHON and PennantPark Floating

Assuming the 90 days trading horizon MARATHON is expected to generate 3.06 times less return on investment than PennantPark Floating. In addition to that, MARATHON is 2.39 times more volatile than PennantPark Floating Rate. It trades about 0.0 of its total potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.02 per unit of volatility. If you would invest  1,117  in PennantPark Floating Rate on October 26, 2024 and sell it today you would earn a total of  9.00  from holding PennantPark Floating Rate or generate 0.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy84.75%
ValuesDaily Returns

MARATHON PETE P  vs.  PennantPark Floating Rate

 Performance 
       Timeline  
MARATHON PETE P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days MARATHON PETE P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MARATHON is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
PennantPark Floating Rate 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
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.

MARATHON and PennantPark Floating Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MARATHON and PennantPark Floating

The main advantage of trading using opposite MARATHON and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MARATHON position performs unexpectedly, PennantPark Floating 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 PennantPark Floating will offset losses from the drop in PennantPark Floating's long position.
The idea behind MARATHON PETE P and PennantPark Floating Rate 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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