Correlation Between PennantPark Investment and Codexis
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment 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 Investment and Codexis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Codexis, you can compare the effects of market volatilities on PennantPark Investment 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 Investment with a short position of Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Codexis.
Diversification Opportunities for PennantPark Investment and Codexis
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PennantPark and Codexis is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis 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 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 Investment i.e., PennantPark Investment and Codexis go up and down completely randomly.
Pair Corralation between PennantPark Investment and Codexis
Given the investment horizon of 90 days PennantPark Investment is expected to generate 6.7 times less return on investment than Codexis. But when comparing it to its historical volatility, PennantPark Investment is 5.42 times less risky than Codexis. It trades about 0.06 of its potential returns per unit of risk. Codexis is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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 |
PennantPark Investment vs. Codexis
Performance |
| Timeline |
| PennantPark Investment |
| Codexis |
PennantPark Investment and Codexis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Codexis
The main advantage of trading using opposite PennantPark Investment and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment 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 Investment vs. Sixth Street Specialty | PennantPark Investment vs. New Mountain Finance | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. BlackRock TCP Capital |
| Codexis vs. Nuvation Bio | Codexis vs. Lyell Immunopharma | Codexis vs. Century Therapeutics | Codexis vs. Generation Bio Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |