Correlation Between PennantPark Floating and American National

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

Diversification Opportunities for PennantPark Floating and American National

0.0

Correlation Coefficient

PennantPark Floating  American National

Pay attention - limited upside

The 3 months correlation between PennantPark and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and American National Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American National 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 American National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American National has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and American National go up and down completely randomly.

Pair Corralation between PennantPark Floating and American National

If you would invest  19,002  in American National Insurance on March 9, 2024 and sell it today you would earn a total of  0.00  from holding American National Insurance or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

PennantPark Floating Rate  vs.  American National Insurance

PennantPark Floating Rate

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Floating Rate are ranked lower than 5 (%) 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.

American National

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PennantPark Floating and American National

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

The idea behind PennantPark Floating Rate and American National Insurance 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.