Correlation Between ARDAGH METAL and PENN NATL
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and PENN NATL 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 ARDAGH METAL and PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and PENN NATL GAMING, you can compare the effects of market volatilities on ARDAGH METAL and PENN NATL 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 ARDAGH METAL with a short position of PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and PENN NATL.
Diversification Opportunities for ARDAGH METAL and PENN NATL
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ARDAGH and PENN is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 are associated (or correlated) with PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and PENN NATL go up and down completely randomly.
Pair Corralation between ARDAGH METAL and PENN NATL
Assuming the 90 days horizon ARDAGH METAL is expected to generate 1.68 times less return on investment than PENN NATL. In addition to that, ARDAGH METAL is 1.23 times more volatile than PENN NATL GAMING. It trades about 0.08 of its total potential returns per unit of risk. PENN NATL GAMING is currently generating about 0.17 per unit of volatility. If you would invest 1,829 in PENN NATL GAMING on August 29, 2024 and sell it today you would earn a total of 178.00 from holding PENN NATL GAMING or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. PENN NATL GAMING
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| PENN NATL GAMING |
ARDAGH METAL and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and PENN NATL
The main advantage of trading using opposite ARDAGH METAL and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, PENN NATL 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 NATL will offset losses from the drop in PENN NATL's long position.| ARDAGH METAL vs. FANDIFI TECHNOLOGY P | ARDAGH METAL vs. WILLIS LEASE FIN | ARDAGH METAL vs. Cars Inc | ARDAGH METAL vs. COMMERCIAL VEHICLE |
| PENN NATL vs. Apple Inc | PENN NATL vs. Apple Inc | PENN NATL vs. Superior Plus Corp | PENN NATL vs. SIVERS SEMICONDUCTORS AB |
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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