Correlation Between GENTING SG and Penn National
Can any of the company-specific risk be diversified away by investing in both GENTING SG and Penn National 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 GENTING SG and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GENTING SG LTD and Penn National Gaming, you can compare the effects of market volatilities on GENTING SG and Penn National 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 GENTING SG with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENTING SG and Penn National.
Diversification Opportunities for GENTING SG and Penn National
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GENTING and Penn is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding GENTING SG LTD and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National Gaming and GENTING SG 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 GENTING SG LTD are associated (or correlated) with Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of GENTING SG i.e., GENTING SG and Penn National go up and down completely randomly.
Pair Corralation between GENTING SG and Penn National
Assuming the 90 days horizon GENTING SG LTD is expected to under-perform the Penn National. But the stock apears to be less risky and, when comparing its historical volatility, GENTING SG LTD is 1.04 times less risky than Penn National. The stock trades about -0.06 of its potential returns per unit of risk. The Penn National Gaming is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,781 in Penn National Gaming on October 23, 2024 and sell it today you would earn a total of 130.00 from holding Penn National Gaming or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GENTING SG LTD vs. Penn National Gaming
Performance |
| Timeline |
| GENTING SG LTD |
| Penn National Gaming |
GENTING SG and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GENTING SG and Penn National
The main advantage of trading using opposite GENTING SG and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENTING SG position performs unexpectedly, Penn National 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 Penn National will offset losses from the drop in Penn National's long position.| GENTING SG vs. Firan Technology Group | GENTING SG vs. Kingdee International Software | GENTING SG vs. Burlington Stores | GENTING SG vs. Fast Retailing Co |
| Penn National vs. Apollo Medical Holdings | Penn National vs. Datadog | Penn National vs. MICRONIC MYDATA | Penn National vs. Northern Data AG |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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