Correlation Between SWISS WATER and Penn National
Can any of the company-specific risk be diversified away by investing in both SWISS WATER 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 SWISS WATER and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and Penn National Gaming, you can compare the effects of market volatilities on SWISS WATER 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 SWISS WATER with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and Penn National.
Diversification Opportunities for SWISS WATER and Penn National
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SWISS and Penn is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 SWISS WATER i.e., SWISS WATER and Penn National go up and down completely randomly.
Pair Corralation between SWISS WATER and Penn National
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the Penn National. In addition to that, SWISS WATER is 1.12 times more volatile than Penn National Gaming. It trades about -0.2 of its total potential returns per unit of risk. Penn National Gaming is currently generating about 0.15 per unit of volatility. If you would invest 1,811 in Penn National Gaming on November 7, 2024 and sell it today you would earn a total of 140.00 from holding Penn National Gaming or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. Penn National Gaming
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| Penn National Gaming |
SWISS WATER and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and Penn National
The main advantage of trading using opposite SWISS WATER and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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.| SWISS WATER vs. SPORTING | SWISS WATER vs. Verizon Communications | SWISS WATER vs. PARKEN Sport Entertainment | SWISS WATER vs. NTG Nordic Transport |
| Penn National vs. Compugroup Medical SE | Penn National vs. Medical Properties Trust | Penn National vs. Genertec Universal Medical | Penn National vs. Peijia Medical Limited |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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