Correlation Between GAMING FAC and PENN NATL
Can any of the company-specific risk be diversified away by investing in both GAMING FAC 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 GAMING FAC and PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMING FAC SA and PENN NATL GAMING, you can compare the effects of market volatilities on GAMING FAC 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 GAMING FAC with a short position of PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and PENN NATL.
Diversification Opportunities for GAMING FAC and PENN NATL
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GAMING and PENN is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA 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 GAMING FAC 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 GAMING FAC SA 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 GAMING FAC i.e., GAMING FAC and PENN NATL go up and down completely randomly.
Pair Corralation between GAMING FAC and PENN NATL
Assuming the 90 days horizon GAMING FAC SA is expected to under-perform the PENN NATL. But the stock apears to be less risky and, when comparing its historical volatility, GAMING FAC SA is 1.11 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 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,732 in PENN NATL GAMING on September 22, 2024 and sell it today you would earn a total of 4.00 from holding PENN NATL GAMING or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMING FAC SA vs. PENN NATL GAMING
Performance |
| Timeline |
| GAMING FAC SA |
| PENN NATL GAMING |
GAMING FAC and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMING FAC and PENN NATL
The main advantage of trading using opposite GAMING FAC and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC 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.| GAMING FAC vs. Kaufman Broad SA | GAMING FAC vs. Sanyo Chemical Industries | GAMING FAC vs. BROADWIND ENRGY | GAMING FAC vs. Soken Chemical Engineering |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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