Correlation Between VIRG NATL and Penn National
Can any of the company-specific risk be diversified away by investing in both VIRG NATL 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 VIRG NATL and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIRG NATL BANKSH and Penn National Gaming, you can compare the effects of market volatilities on VIRG NATL 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 VIRG NATL with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIRG NATL and Penn National.
Diversification Opportunities for VIRG NATL and Penn National
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VIRG and Penn is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding VIRG NATL BANKSH 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 VIRG NATL 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 VIRG NATL BANKSH 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 VIRG NATL i.e., VIRG NATL and Penn National go up and down completely randomly.
Pair Corralation between VIRG NATL and Penn National
Assuming the 90 days horizon VIRG NATL is expected to generate 1.74 times less return on investment than Penn National. In addition to that, VIRG NATL is 1.53 times more volatile than Penn National Gaming. It trades about 0.09 of its total potential returns per unit of risk. Penn National Gaming is currently generating about 0.25 per unit of volatility. If you would invest 1,771 in Penn National Gaming on September 5, 2024 and sell it today you would earn a total of 267.00 from holding Penn National Gaming or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
VIRG NATL BANKSH vs. Penn National Gaming
Performance |
| Timeline |
| VIRG NATL BANKSH |
| Penn National Gaming |
VIRG NATL and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIRG NATL and Penn National
The main advantage of trading using opposite VIRG NATL and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIRG NATL 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.| VIRG NATL vs. MINCO SILVER | VIRG NATL vs. MOLSON RS BEVERAGE | VIRG NATL vs. Calibre Mining Corp | VIRG NATL vs. The Boston Beer |
| Penn National vs. GOODYEAR T RUBBER | Penn National vs. VIRG NATL BANKSH | Penn National vs. National Bank Holdings | Penn National vs. Sumitomo Rubber Industries |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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