Correlation Between Eagle Point and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Eagle Point and PennantPark Investment 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 Eagle Point and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Point Credit and PennantPark Investment, you can compare the effects of market volatilities on Eagle Point and PennantPark Investment 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 Eagle Point with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and PennantPark Investment.
Diversification Opportunities for Eagle Point and PennantPark Investment
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and PennantPark is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Eagle Point 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 Eagle Point Credit are associated (or correlated) with PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Eagle Point i.e., Eagle Point and PennantPark Investment go up and down completely randomly.
Pair Corralation between Eagle Point and PennantPark Investment
Considering the 90-day investment horizon Eagle Point Credit is expected to under-perform the PennantPark Investment. In addition to that, Eagle Point is 1.75 times more volatile than PennantPark Investment. It trades about -0.06 of its total potential returns per unit of risk. PennantPark Investment is currently generating about -0.11 per unit of volatility. If you would invest 695.00 in PennantPark Investment on August 18, 2025 and sell it today you would lose (50.00) from holding PennantPark Investment or give up 7.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Point Credit vs. PennantPark Investment
Performance |
| Timeline |
| Eagle Point Credit |
| PennantPark Investment |
Eagle Point and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and PennantPark Investment
The main advantage of trading using opposite Eagle Point and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, PennantPark Investment 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 Investment will offset losses from the drop in PennantPark Investment's long position.| Eagle Point vs. SLR Investment Corp | Eagle Point vs. PennantPark Floating Rate | Eagle Point vs. Tortoise Energy Infrastructure | Eagle Point vs. Carlyle Secured Lending |
| PennantPark Investment vs. Gladstone Capital | PennantPark Investment vs. Barings Corporate Investors | PennantPark Investment vs. Gladstone Investment | PennantPark Investment vs. Stellus Capital 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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