Correlation Between Casio Computer and PENN Entertainment
Can any of the company-specific risk be diversified away by investing in both Casio Computer 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 Casio Computer and PENN Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Casio Computer CoLtd and PENN Entertainment, you can compare the effects of market volatilities on Casio Computer 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 Casio Computer with a short position of PENN Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casio Computer and PENN Entertainment.
Diversification Opportunities for Casio Computer and PENN Entertainment
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Casio and PENN is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer CoLtd and PENN Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment and Casio Computer 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 Casio Computer CoLtd 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 Casio Computer i.e., Casio Computer and PENN Entertainment go up and down completely randomly.
Pair Corralation between Casio Computer and PENN Entertainment
Assuming the 90 days trading horizon Casio Computer CoLtd is expected to under-perform the PENN Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Casio Computer CoLtd is 2.65 times less risky than PENN Entertainment. The stock trades about -0.02 of its potential returns per unit of risk. The PENN Entertainment is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,759 in PENN Entertainment on October 29, 2024 and sell it today you would earn a total of 142.00 from holding PENN Entertainment or generate 8.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casio Computer CoLtd vs. PENN Entertainment
Performance |
| Timeline |
| Casio Computer CoLtd |
| PENN Entertainment |
Casio Computer and PENN Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casio Computer and PENN Entertainment
The main advantage of trading using opposite Casio Computer and PENN Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer 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.| Casio Computer vs. Apple Inc | Casio Computer vs. Apple Inc | Casio Computer vs. Samsung Electronics Co | Casio Computer vs. Samsung Electronics Co |
| PENN Entertainment vs. Addus HomeCare | PENN Entertainment vs. LANDSEA GREEN MANAGEMENT | PENN Entertainment vs. Cleanaway Waste Management | PENN Entertainment vs. Haier Smart Home |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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