Correlation Between Superior Plus and PENN NATL
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and PENN NATL GAMING, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and PENN NATL.
Diversification Opportunities for Superior Plus and PENN NATL
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and PENN is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and PENN NATL go up and down completely randomly.
Pair Corralation between Superior Plus and PENN NATL
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the PENN NATL. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.5 times less risky than PENN NATL. The stock trades about -0.04 of its potential returns per unit of risk. The PENN NATL GAMING is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,086 in PENN NATL GAMING on September 1, 2024 and sell it today you would lose (103.00) from holding PENN NATL GAMING or give up 4.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. PENN NATL GAMING
Performance |
| Timeline |
| Superior Plus Corp |
| PENN NATL GAMING |
Superior Plus and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and PENN NATL
The main advantage of trading using opposite Superior Plus and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. TSOGO SUN GAMING | Superior Plus vs. FUTURE GAMING GRP | Superior Plus vs. TROPHY GAMES DEV | Superior Plus vs. Boyd Gaming |
| PENN NATL vs. SIVERS SEMICONDUCTORS AB | PENN NATL vs. Darden Restaurants | PENN NATL vs. Reliance Steel Aluminum | PENN NATL vs. Q2M Managementberatung AG |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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