Correlation Between PennantPark Investment and Amgen
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment and Amgen 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 Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Amgen Inc, you can compare the effects of market volatilities on PennantPark Investment and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Amgen.
Diversification Opportunities for PennantPark Investment and Amgen
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennantPark and Amgen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of PennantPark Investment i.e., PennantPark Investment and Amgen go up and down completely randomly.
Pair Corralation between PennantPark Investment and Amgen
Given the investment horizon of 90 days PennantPark Investment is expected to generate 0.62 times more return on investment than Amgen. However, PennantPark Investment is 1.61 times less risky than Amgen. It trades about -0.03 of its potential returns per unit of risk. Amgen Inc is currently generating about -0.23 per unit of risk. 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 |
PennantPark Investment vs. Amgen Inc
Performance |
| Timeline |
| PennantPark Investment |
| Amgen Inc |
PennantPark Investment and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Amgen
The main advantage of trading using opposite PennantPark Investment and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.| PennantPark Investment vs. Visa Class A | PennantPark Investment vs. Diamond Hill Investment | PennantPark Investment vs. Distoken Acquisition | PennantPark Investment vs. Associated Capital Group |
| Amgen vs. Tff Pharmaceuticals | Amgen vs. Eliem Therapeutics | Amgen vs. Inhibrx | Amgen vs. Enliven Therapeutics |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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