Correlation Between Datang International and Penn National
Can any of the company-specific risk be diversified away by investing in both Datang International 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 Datang International and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datang International Power and Penn National Gaming, you can compare the effects of market volatilities on Datang International 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 Datang International with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and Penn National.
Diversification Opportunities for Datang International and Penn National
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Datang and Penn is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power 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 Datang International 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 Datang International Power 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 Datang International i.e., Datang International and Penn National go up and down completely randomly.
Pair Corralation between Datang International and Penn National
Assuming the 90 days horizon Datang International Power is expected to generate 1.06 times more return on investment than Penn National. However, Datang International is 1.06 times more volatile than Penn National Gaming. It trades about 0.01 of its potential returns per unit of risk. Penn National Gaming is currently generating about -0.03 per unit of risk. If you would invest 17.00 in Datang International Power on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Datang International Power or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang International Power vs. Penn National Gaming
Performance |
| Timeline |
| Datang International |
| Penn National Gaming |
Datang International and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and Penn National
The main advantage of trading using opposite Datang International and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International 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.| Datang International vs. Autohome ADR | Datang International vs. Neinor Homes SA | Datang International vs. Haier Smart Home | Datang International vs. bet at home AG |
| Penn National vs. Sands China | Penn National vs. Superior Plus Corp | Penn National vs. SIVERS SEMICONDUCTORS AB | Penn National vs. Norsk Hydro ASA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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