Correlation Between FORTRESS BIOTECHPRFA and Penn National
Can any of the company-specific risk be diversified away by investing in both FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FORTRESS BIOTECHPRFA 25 and Penn National Gaming, you can compare the effects of market volatilities on FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of FORTRESS BIOTECHPRFA and Penn National.
Diversification Opportunities for FORTRESS BIOTECHPRFA and Penn National
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between FORTRESS and Penn is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding FORTRESS BIOTECHPRFA 25 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 FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA 25 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 FORTRESS BIOTECHPRFA i.e., FORTRESS BIOTECHPRFA and Penn National go up and down completely randomly.
Pair Corralation between FORTRESS BIOTECHPRFA and Penn National
Assuming the 90 days trading horizon FORTRESS BIOTECHPRFA 25 is expected to under-perform the Penn National. In addition to that, FORTRESS BIOTECHPRFA is 1.45 times more volatile than Penn National Gaming. It trades about -0.27 of its total potential returns per unit of risk. Penn National Gaming is currently generating about -0.1 per unit of volatility. If you would invest 1,992 in Penn National Gaming on December 8, 2024 and sell it today you would lose (145.00) from holding Penn National Gaming or give up 7.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FORTRESS BIOTECHPRFA 25 vs. Penn National Gaming
Performance |
| Timeline |
| FORTRESS BIOTECHPRFA |
| Penn National Gaming |
FORTRESS BIOTECHPRFA and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FORTRESS BIOTECHPRFA and Penn National
The main advantage of trading using opposite FORTRESS BIOTECHPRFA and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORTRESS BIOTECHPRFA 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.| FORTRESS BIOTECHPRFA vs. Novo Nordisk AS | ||
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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