Correlation Between Amgen and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Amgen 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 Amgen and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and PennantPark Investment, you can compare the effects of market volatilities on Amgen 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 Amgen with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and PennantPark Investment.
Diversification Opportunities for Amgen and PennantPark Investment
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amgen and PennantPark is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Amgen 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 Amgen Inc 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 Amgen i.e., Amgen and PennantPark Investment go up and down completely randomly.
Pair Corralation between Amgen and PennantPark Investment
Given the investment horizon of 90 days Amgen Inc is expected to under-perform the PennantPark Investment. In addition to that, Amgen is 1.61 times more volatile than PennantPark Investment. It trades about -0.23 of its total potential returns per unit of risk. PennantPark Investment is currently generating about -0.03 per unit of volatility. If you would invest 685.00 in PennantPark Investment on September 1, 2024 and sell it today you would lose (8.00) from holding PennantPark Investment or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. PennantPark Investment
Performance |
| Timeline |
| Amgen Inc |
| PennantPark Investment |
Amgen and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and PennantPark Investment
The main advantage of trading using opposite Amgen and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen 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.The idea behind Amgen Inc and PennantPark Investment 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.| PennantPark Investment vs. Visa Class A | PennantPark Investment vs. Diamond Hill Investment | PennantPark Investment vs. Distoken Acquisition | PennantPark Investment vs. Associated Capital Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| CEOs Directory Screen CEOs from public companies around the world |