Correlation Between Bio Meat and PennantPark Floating

Can any of the company-specific risk be diversified away by investing in both Bio Meat 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 Bio Meat and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bio Meat Foodtech and PennantPark Floating Rate, you can compare the effects of market volatilities on Bio Meat 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 Bio Meat with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Meat and PennantPark Floating.

Diversification Opportunities for Bio Meat and PennantPark Floating

-0.77

Correlation Coefficient

Bio Meat  PennantPark Floating

Pay attention - limited upside

The 3 months correlation between Bio and PennantPark is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bio Meat Foodtech 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 Bio Meat 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 Bio Meat Foodtech 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 Bio Meat i.e., Bio Meat and PennantPark Floating go up and down completely randomly.

Pair Corralation between Bio Meat and PennantPark Floating

Assuming the 90 days trading horizon Bio Meat Foodtech is expected to under-perform the PennantPark Floating. But the stock apears to be less risky and, when comparing its historical volatility, Bio Meat Foodtech is 2.02 times less risky than PennantPark Floating. The stock trades about -0.06 of its potential returns per unit of risk. The PennantPark Floating Rate is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  2,375  in PennantPark Floating Rate on September 16, 2024 and sell it today you would earn a total of  1,798  from holding PennantPark Floating Rate or generate 75.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.87%
Values	Daily Returns

Bio Meat Foodtech  vs.  PennantPark Floating Rate

Bio Meat Foodtech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio Meat Foodtech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PennantPark Floating Rate

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Floating Rate are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PennantPark Floating sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bio Meat and PennantPark Floating

The main advantage of trading using opposite Bio Meat and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Meat 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 Bio Meat Foodtech 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..