Correlation Between Jacobs Solutions and PennantPark Floating

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions 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 Jacobs Solutions and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and PennantPark Floating Rate, you can compare the effects of market volatilities on Jacobs Solutions 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 Jacobs Solutions with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and PennantPark Floating.

Diversification Opportunities for Jacobs Solutions and PennantPark Floating

JacobsPennantParkDiversified AwayJacobsPennantParkDiversified Away100%
0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Jacobs and PennantPark is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions 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 Jacobs Solutions 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 Jacobs Solutions 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 Jacobs Solutions i.e., Jacobs Solutions and PennantPark Floating go up and down completely randomly.

Pair Corralation between Jacobs Solutions and PennantPark Floating

Taking into account the 90-day investment horizon Jacobs Solutions is expected to generate 1.81 times more return on investment than PennantPark Floating. However, Jacobs Solutions is 1.81 times more volatile than PennantPark Floating Rate. It trades about 0.09 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about -0.09 per unit of risk. If you would invest  12,359  in Jacobs Solutions on September 21, 2024 and sell it today you would earn a total of  1,047  from holding Jacobs Solutions or generate 8.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jacobs Solutions  vs.  PennantPark Floating Rate

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 05101520
JavaScript chart by amCharts 3.21.15J PFLT
       Timeline  
Jacobs Solutions 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady forward-looking indicators, Jacobs Solutions may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec130135140145150
PennantPark Floating Rate 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec10.610.81111.211.411.6

Jacobs Solutions and PennantPark Floating Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.78-3.58-2.38-1.18-0.021.222.483.755.016.28 0.10.20.30.40.5
JavaScript chart by amCharts 3.21.15J PFLT
       Returns  

Pair Trading with Jacobs Solutions and PennantPark Floating

The main advantage of trading using opposite Jacobs Solutions and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions 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 Jacobs Solutions 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.
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes