Correlation Between BIOPHARMA CREDIT and Penn National
Can any of the company-specific risk be diversified away by investing in both BIOPHARMA CREDIT 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 BIOPHARMA CREDIT and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIOPHARMA CREDIT DL and Penn National Gaming, you can compare the effects of market volatilities on BIOPHARMA CREDIT 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 BIOPHARMA CREDIT with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIOPHARMA CREDIT and Penn National.
Diversification Opportunities for BIOPHARMA CREDIT and Penn National
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between BIOPHARMA and Penn is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding BIOPHARMA CREDIT DL 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 BIOPHARMA CREDIT 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 BIOPHARMA CREDIT DL 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 BIOPHARMA CREDIT i.e., BIOPHARMA CREDIT and Penn National go up and down completely randomly.
Pair Corralation between BIOPHARMA CREDIT and Penn National
Assuming the 90 days horizon BIOPHARMA CREDIT DL is expected to under-perform the Penn National. In addition to that, BIOPHARMA CREDIT is 1.12 times more volatile than Penn National Gaming. It trades about -0.09 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 |
BIOPHARMA CREDIT DL vs. Penn National Gaming
Performance |
| Timeline |
| BIOPHARMA CREDIT |
| Penn National Gaming |
BIOPHARMA CREDIT and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIOPHARMA CREDIT and Penn National
The main advantage of trading using opposite BIOPHARMA CREDIT and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIOPHARMA CREDIT 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.| BIOPHARMA CREDIT vs. SIVERS SEMICONDUCTORS AB | BIOPHARMA CREDIT vs. NorAm Drilling AS | BIOPHARMA CREDIT vs. Volkswagen AG | BIOPHARMA CREDIT vs. Darden Restaurants |
| 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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