Correlation Between PennantPark Investment and Omeros
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Omeros 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 Investment and Omeros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Omeros, you can compare the effects of market volatilities on PennantPark Investment and Omeros 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 Investment with a short position of Omeros. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Omeros.
Diversification Opportunities for PennantPark Investment and Omeros
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PennantPark and Omeros is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Omeros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omeros and PennantPark Investment 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 Investment are associated (or correlated) with Omeros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omeros has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Omeros go up and down completely randomly.
Pair Corralation between PennantPark Investment and Omeros
Assuming the 90 days horizon PennantPark Investment is expected to generate 2.63 times less return on investment than Omeros. But when comparing it to its historical volatility, PennantPark Investment is 5.71 times less risky than Omeros. It trades about 0.2 of its potential returns per unit of risk. Omeros is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 859.00 in Omeros on October 12, 2024 and sell it today you would earn a total of 85.00 from holding Omeros or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
PennantPark Investment vs. Omeros
Performance |
| Timeline |
| PennantPark Investment |
| Omeros |
PennantPark Investment and Omeros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Omeros
The main advantage of trading using opposite PennantPark Investment and Omeros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Omeros 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 Omeros will offset losses from the drop in Omeros' long position.| PennantPark Investment vs. Nomad Foods | PennantPark Investment vs. GEELY AUTOMOBILE | PennantPark Investment vs. MTY Food Group | PennantPark Investment vs. Spirent Communications plc |
| Omeros vs. DATA MODUL | Omeros vs. PennantPark Investment | Omeros vs. MICRONIC MYDATA | Omeros vs. Automatic Data Processing |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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