Correlation Between Cass Information and Penn National
Can any of the company-specific risk be diversified away by investing in both Cass Information 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 Cass Information and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cass Information Systems and Penn National Gaming, you can compare the effects of market volatilities on Cass Information 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 Cass Information with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Penn National.
Diversification Opportunities for Cass Information and Penn National
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cass and Penn is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems 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 Cass Information 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 Cass Information Systems 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 Cass Information i.e., Cass Information and Penn National go up and down completely randomly.
Pair Corralation between Cass Information and Penn National
Assuming the 90 days horizon Cass Information Systems is expected to generate 0.57 times more return on investment than Penn National. However, Cass Information Systems is 1.77 times less risky than Penn National. It trades about 0.02 of its potential returns per unit of risk. Penn National Gaming is currently generating about -0.01 per unit of risk. If you would invest 4,000 in Cass Information Systems on September 12, 2024 and sell it today you would earn a total of 160.00 from holding Cass Information Systems or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. Penn National Gaming
Performance |
| Timeline |
| Cass Information Systems |
| Penn National Gaming |
Cass Information and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Penn National
The main advantage of trading using opposite Cass Information and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information 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.| Cass Information vs. Cintas | Cass Information vs. RELO GROUP INC | Cass Information vs. Superior Plus Corp | Cass Information vs. SIVERS SEMICONDUCTORS AB |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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