Correlation Between CHINA TONTINE and PENN NATL
Can any of the company-specific risk be diversified away by investing in both CHINA TONTINE and PENN NATL 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 CHINA TONTINE and PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA TONTINE WINES and PENN NATL GAMING, you can compare the effects of market volatilities on CHINA TONTINE and PENN NATL 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 CHINA TONTINE with a short position of PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TONTINE and PENN NATL.
Diversification Opportunities for CHINA TONTINE and PENN NATL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and PENN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING and CHINA TONTINE 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 CHINA TONTINE WINES are associated (or correlated) with PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of CHINA TONTINE i.e., CHINA TONTINE and PENN NATL go up and down completely randomly.
Pair Corralation between CHINA TONTINE and PENN NATL
Assuming the 90 days trading horizon CHINA TONTINE WINES is expected to generate 13.95 times more return on investment than PENN NATL. However, CHINA TONTINE is 13.95 times more volatile than PENN NATL GAMING. It trades about 0.05 of its potential returns per unit of risk. PENN NATL GAMING is currently generating about 0.0 per unit of risk. If you would invest 0.70 in CHINA TONTINE WINES on August 31, 2024 and sell it today you would earn a total of 6.30 from holding CHINA TONTINE WINES or generate 900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
CHINA TONTINE WINES vs. PENN NATL GAMING
Performance |
| Timeline |
| CHINA TONTINE WINES |
| PENN NATL GAMING |
CHINA TONTINE and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TONTINE and PENN NATL
The main advantage of trading using opposite CHINA TONTINE and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TONTINE position performs unexpectedly, PENN NATL 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 NATL will offset losses from the drop in PENN NATL's long position.| CHINA TONTINE vs. ANDREW PELLER LTD | CHINA TONTINE vs. NAKED WINES PLC | CHINA TONTINE vs. Superior Plus Corp | CHINA TONTINE vs. NMI Holdings |
| PENN NATL vs. SERI INDUSTRIAL EO | PENN NATL vs. Arrow Electronics | PENN NATL vs. KIMBALL ELECTRONICS | PENN NATL vs. MCEWEN MINING INC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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