Correlation Between CEOTRONICS and Penn National
Can any of the company-specific risk be diversified away by investing in both CEOTRONICS 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 CEOTRONICS and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEOTRONICS and Penn National Gaming, you can compare the effects of market volatilities on CEOTRONICS 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 CEOTRONICS with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEOTRONICS and Penn National.
Diversification Opportunities for CEOTRONICS and Penn National
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between CEOTRONICS and Penn is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding CEOTRONICS 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 CEOTRONICS 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 CEOTRONICS 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 CEOTRONICS i.e., CEOTRONICS and Penn National go up and down completely randomly.
Pair Corralation between CEOTRONICS and Penn National
Assuming the 90 days trading horizon CEOTRONICS is expected to generate 0.77 times more return on investment than Penn National. However, CEOTRONICS is 1.3 times less risky than Penn National. It trades about 0.03 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 440.00 in CEOTRONICS on August 29, 2024 and sell it today you would earn a total of 95.00 from holding CEOTRONICS or generate 21.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEOTRONICS vs. Penn National Gaming
Performance |
| Timeline |
| CEOTRONICS |
| Penn National Gaming |
CEOTRONICS and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEOTRONICS and Penn National
The main advantage of trading using opposite CEOTRONICS and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEOTRONICS 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.| CEOTRONICS vs. CITY OFFICE REIT | CEOTRONICS vs. Tower One Wireless | CEOTRONICS vs. UNIVMUSIC GRPADR050 | CEOTRONICS vs. Nucletron Electronic Aktiengesellschaft |
| Penn National vs. Galaxy Entertainment Group | Penn National vs. ENTAIN PLC UNSPADR1 | Penn National vs. Superior Plus Corp | Penn National vs. NMI Holdings |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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