Correlation Between PennantPark Floating and Codexis
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Codexis 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 Codexis 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 Codexis, you can compare the effects of market volatilities on PennantPark Floating and Codexis 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 Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Codexis.
Diversification Opportunities for PennantPark Floating and Codexis
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and Codexis is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis 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 Codexis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Codexis has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Codexis go up and down completely randomly.
Pair Corralation between PennantPark Floating and Codexis
Given the investment horizon of 90 days PennantPark Floating is expected to generate 126.77 times less return on investment than Codexis. But when comparing it to its historical volatility, PennantPark Floating Rate is 6.44 times less risky than Codexis. It trades about 0.02 of its potential returns per unit of risk. Codexis is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 314.00 in Codexis on September 1, 2024 and sell it today you would earn a total of 144.00 from holding Codexis or generate 45.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Codexis
Performance |
| Timeline |
| PennantPark Floating Rate |
| Codexis |
PennantPark Floating and Codexis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Codexis
The main advantage of trading using opposite PennantPark Floating and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Codexis 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 Codexis will offset losses from the drop in Codexis' long position.| PennantPark Floating vs. Visa Class A | PennantPark Floating vs. Diamond Hill Investment | PennantPark Floating vs. Distoken Acquisition | PennantPark Floating vs. Associated Capital Group |
| Codexis vs. Verve Therapeutics | Codexis vs. Beam Therapeutics | Codexis vs. Caribou Biosciences | Codexis vs. Sana Biotechnology |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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