Correlation Between Codexis and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Codexis 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 Codexis and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Codexis and PennantPark Investment, you can compare the effects of market volatilities on Codexis 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 Codexis with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codexis and PennantPark Investment.
Diversification Opportunities for Codexis and PennantPark Investment
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Codexis and PennantPark is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment 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 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 Codexis i.e., Codexis and PennantPark Investment go up and down completely randomly.
Pair Corralation between Codexis and PennantPark Investment
Given the investment horizon of 90 days Codexis is expected to generate 5.42 times more return on investment than PennantPark Investment. However, Codexis is 5.42 times more volatile than PennantPark Investment. It trades about 0.08 of its potential returns per unit of risk. PennantPark Investment is currently generating about 0.06 per unit of risk. If you would invest 228.00 in Codexis on September 3, 2024 and sell it today you would earn a total of 244.00 from holding Codexis or generate 107.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Codexis vs. PennantPark Investment
Performance |
| Timeline |
| Codexis |
| PennantPark Investment |
Codexis and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Codexis and PennantPark Investment
The main advantage of trading using opposite Codexis and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Codexis 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.| Codexis vs. Nuvation Bio | Codexis vs. Lyell Immunopharma | Codexis vs. Century Therapeutics | Codexis vs. Generation Bio Co |
| PennantPark Investment vs. Sixth Street Specialty | PennantPark Investment vs. New Mountain Finance | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. BlackRock TCP Capital |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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