Correlation Between DevEx Resources and PENN Entertainment
Can any of the company-specific risk be diversified away by investing in both DevEx Resources and PENN Entertainment 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 DevEx Resources and PENN Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DevEx Resources Limited and PENN Entertainment, you can compare the effects of market volatilities on DevEx Resources and PENN Entertainment 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 DevEx Resources with a short position of PENN Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DevEx Resources and PENN Entertainment.
Diversification Opportunities for DevEx Resources and PENN Entertainment
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between DevEx and PENN is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding DevEx Resources Limited and PENN Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment and DevEx Resources 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 DevEx Resources Limited are associated (or correlated) with PENN Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN Entertainment has no effect on the direction of DevEx Resources i.e., DevEx Resources and PENN Entertainment go up and down completely randomly.
Pair Corralation between DevEx Resources and PENN Entertainment
Assuming the 90 days horizon DevEx Resources Limited is expected to generate 3.14 times more return on investment than PENN Entertainment. However, DevEx Resources is 3.14 times more volatile than PENN Entertainment. It trades about 0.02 of its potential returns per unit of risk. PENN Entertainment is currently generating about -0.01 per unit of risk. If you would invest 20.00 in DevEx Resources Limited on October 25, 2024 and sell it today you would lose (14.05) from holding DevEx Resources Limited or give up 70.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DevEx Resources Limited vs. PENN Entertainment
Performance |
| Timeline |
| DevEx Resources |
| PENN Entertainment |
DevEx Resources and PENN Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DevEx Resources and PENN Entertainment
The main advantage of trading using opposite DevEx Resources and PENN Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DevEx Resources position performs unexpectedly, PENN Entertainment 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 Entertainment will offset losses from the drop in PENN Entertainment's long position.| DevEx Resources vs. TIANDE CHEMICAL | DevEx Resources vs. INDO RAMA SYNTHETIC | DevEx Resources vs. Siamgas And Petrochemicals | DevEx Resources vs. Sekisui Chemical Co |
| PENN Entertainment vs. Apple Inc | PENN Entertainment vs. Apple Inc | PENN Entertainment vs. Apple Inc | PENN Entertainment vs. Apple Inc |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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