Correlation Between PKSHA TECHNOLOGY and PENN Entertainment
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and PENN Entertainment 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 PKSHA TECHNOLOGY and PENN Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PKSHA TECHNOLOGY INC and PENN Entertainment, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and PENN Entertainment 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 PKSHA TECHNOLOGY with a short position of PENN Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and PENN Entertainment.
Diversification Opportunities for PKSHA TECHNOLOGY and PENN Entertainment
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PKSHA and PENN is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and PENN Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC are associated (or correlated) with PENN Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN Entertainment has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and PENN Entertainment go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and PENN Entertainment
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.18 times more return on investment than PENN Entertainment. However, PKSHA TECHNOLOGY is 1.18 times more volatile than PENN Entertainment. It trades about 0.04 of its potential returns per unit of risk. PENN Entertainment is currently generating about -0.01 per unit of risk. If you would invest 1,270 in PKSHA TECHNOLOGY INC on October 31, 2024 and sell it today you would earn a total of 790.00 from holding PKSHA TECHNOLOGY INC or generate 62.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. PENN Entertainment
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| PENN Entertainment |
PKSHA TECHNOLOGY and PENN Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and PENN Entertainment
The main advantage of trading using opposite PKSHA TECHNOLOGY and PENN Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, PENN Entertainment 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 Entertainment will offset losses from the drop in PENN Entertainment's long position.| PKSHA TECHNOLOGY vs. De Grey Mining | PKSHA TECHNOLOGY vs. Check Point Software | PKSHA TECHNOLOGY vs. MACOM Technology Solutions | PKSHA TECHNOLOGY vs. Endeavour Mining PLC |
| PENN Entertainment vs. Westinghouse Air Brake | PENN Entertainment vs. Eagle Materials | PENN Entertainment vs. Vulcan Materials | PENN Entertainment vs. VARIOUS EATERIES LS |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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