Correlation Between Codexis and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Codexis 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 Codexis and PennantPark Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Codexis and PennantPark Floating Rate, you can compare the effects of market volatilities on Codexis 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 Codexis with a short position of PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codexis and PennantPark Floating.
Diversification Opportunities for Codexis and PennantPark Floating
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Codexis and PennantPark is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Codexis 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 Codexis 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 Codexis 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 Codexis i.e., Codexis and PennantPark Floating go up and down completely randomly.
Pair Corralation between Codexis and PennantPark Floating
Given the investment horizon of 90 days Codexis is expected to generate 5.39 times more return on investment than PennantPark Floating. However, Codexis is 5.39 times more volatile than PennantPark Floating Rate. It trades about 0.4 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about -0.16 per unit of risk. If you would invest 318.00 in Codexis on August 29, 2024 and sell it today you would earn a total of 138.00 from holding Codexis or generate 43.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Codexis vs. PennantPark Floating Rate
Performance |
| Timeline |
| Codexis |
| PennantPark Floating Rate |
Codexis and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Codexis and PennantPark Floating
The main advantage of trading using opposite Codexis and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Codexis 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.| Codexis vs. Nuvation Bio | Codexis vs. Lyell Immunopharma | Codexis vs. Century Therapeutics | Codexis vs. Generation Bio Co |
| PennantPark Floating vs. Aurora Innovation | PennantPark Floating vs. HUMANA INC | PennantPark Floating vs. Aquagold International | PennantPark Floating vs. Barloworld Ltd ADR |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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