Correlation Between Sellas Life and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Sellas Life 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 Sellas Life and PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sellas Life Sciences and PennantPark Investment, you can compare the effects of market volatilities on Sellas Life 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 Sellas Life with a short position of PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and PennantPark Investment.
Diversification Opportunities for Sellas Life and PennantPark Investment
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sellas and PennantPark is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment and Sellas Life 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 Sellas Life Sciences 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 Sellas Life i.e., Sellas Life and PennantPark Investment go up and down completely randomly.
Pair Corralation between Sellas Life and PennantPark Investment
Considering the 90-day investment horizon Sellas Life Sciences is expected to generate 2.97 times more return on investment than PennantPark Investment. However, Sellas Life is 2.97 times more volatile than PennantPark Investment. It trades about 0.12 of its potential returns per unit of risk. PennantPark Investment is currently generating about 0.03 per unit of risk. If you would invest 112.00 in Sellas Life Sciences on August 24, 2024 and sell it today you would earn a total of 10.00 from holding Sellas Life Sciences or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sellas Life Sciences vs. PennantPark Investment
Performance |
| Timeline |
| Sellas Life Sciences |
| PennantPark Investment |
Sellas Life and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sellas Life and PennantPark Investment
The main advantage of trading using opposite Sellas Life and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life 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.| Sellas Life vs. ZyVersa Therapeutics | Sellas Life vs. Sonnet Biotherapeutics Holdings | Sellas Life vs. Zura Bio Limited | Sellas Life vs. Phio Pharmaceuticals Corp |
| PennantPark Investment vs. DWS Municipal Income | PennantPark Investment vs. Blackrock Munivest | PennantPark Investment vs. SEI Investments | PennantPark Investment vs. SCOR PK |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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