Correlation Between PennantPark Floating and Aeries Technology

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

Diversification Opportunities for PennantPark Floating and Aeries Technology

0.18

Correlation Coefficient

PennantPark Floating  Aeries Technology

Average diversification

The 3 months correlation between PennantPark and Aeries is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology 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 Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Aeries Technology go up and down completely randomly.

Pair Corralation between PennantPark Floating and Aeries Technology

Given the investment horizon of 90 days PennantPark Floating is expected to generate 19.65 times less return on investment than Aeries Technology. But when comparing it to its historical volatility, PennantPark Floating Rate is 19.67 times less risky than Aeries Technology. It trades about 0.12 of its potential returns per unit of risk. Aeries Technology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Aeries Technology on May 6, 2025 and sell it today you would earn a total of  0.64  from holding Aeries Technology or generate 32.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	53.23%
Values	Daily Returns

PennantPark Floating Rate  vs.  Aeries Technology

PennantPark Floating Rate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PennantPark Floating Rate are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, PennantPark Floating may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Aeries Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aeries Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Aeries Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PennantPark Floating and Aeries Technology

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

The idea behind PennantPark Floating Rate and Aeries Technology 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.