Correlation Between Century Casinos and Penn National
Can any of the company-specific risk be diversified away by investing in both Century Casinos 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 Century Casinos and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Casinos and Penn National Gaming, you can compare the effects of market volatilities on Century Casinos 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 Century Casinos with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Casinos and Penn National.
Diversification Opportunities for Century Casinos and Penn National
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and Penn is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Century Casinos 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 Century Casinos 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 Century Casinos 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 Century Casinos i.e., Century Casinos and Penn National go up and down completely randomly.
Pair Corralation between Century Casinos and Penn National
Given the investment horizon of 90 days Century Casinos is expected to generate 1.52 times more return on investment than Penn National. However, Century Casinos is 1.52 times more volatile than Penn National Gaming. It trades about 0.36 of its potential returns per unit of risk. Penn National Gaming is currently generating about 0.07 per unit of risk. If you would invest 322.00 in Century Casinos on August 27, 2024 and sell it today you would earn a total of 117.00 from holding Century Casinos or generate 36.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Casinos vs. Penn National Gaming
Performance |
| Timeline |
| Century Casinos |
| Penn National Gaming |
Century Casinos and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Casinos and Penn National
The main advantage of trading using opposite Century Casinos and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Casinos 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.| Century Casinos vs. Golden Entertainment | Century Casinos vs. Monarch Casino Resort | Century Casinos vs. Red Rock Resorts | Century Casinos vs. Studio City International |
| Penn National vs. DraftKings | Penn National vs. MGM Resorts International | Penn National vs. Caesars Entertainment | Penn National vs. Boyd Gaming |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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