Correlation Between Sands China and Penn National
Can any of the company-specific risk be diversified away by investing in both Sands China 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 Sands China and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sands China and Penn National Gaming, you can compare the effects of market volatilities on Sands China 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 Sands China with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sands China and Penn National.
Diversification Opportunities for Sands China and Penn National
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sands and Penn is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sands China 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 Sands China 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 Sands China 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 Sands China i.e., Sands China and Penn National go up and down completely randomly.
Pair Corralation between Sands China and Penn National
Assuming the 90 days trading horizon Sands China is expected to generate 1.11 times more return on investment than Penn National. However, Sands China is 1.11 times more volatile than Penn National Gaming. It trades about 0.12 of its potential returns per unit of risk. Penn National Gaming is currently generating about -0.04 per unit of risk. If you would invest 235.00 in Sands China on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Sands China or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sands China vs. Penn National Gaming
Performance |
| Timeline |
| Sands China |
| Penn National Gaming |
Sands China and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sands China and Penn National
The main advantage of trading using opposite Sands China and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sands China 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.| Sands China vs. REINET INVESTMENTS SCA | Sands China vs. AGNC INVESTMENT | Sands China vs. SCOTT TECHNOLOGY | Sands China vs. WisdomTree Investments |
| Penn National vs. Tradegate AG Wertpapierhandelsbank | Penn National vs. The Hanover Insurance | Penn National vs. FUTURE GAMING GRP | Penn National vs. JSC Halyk bank |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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