Correlation Between PARKEN Sport and Penn National
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport 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 PARKEN Sport and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARKEN Sport Entertainment and Penn National Gaming, you can compare the effects of market volatilities on PARKEN Sport 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 PARKEN Sport with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Penn National.
Diversification Opportunities for PARKEN Sport and Penn National
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PARKEN and Penn is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment 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 PARKEN Sport 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 PARKEN Sport Entertainment 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 PARKEN Sport i.e., PARKEN Sport and Penn National go up and down completely randomly.
Pair Corralation between PARKEN Sport and Penn National
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to under-perform the Penn National. But the stock apears to be less risky and, when comparing its historical volatility, PARKEN Sport Entertainment is 1.8 times less risky than Penn National. The stock trades about -0.02 of its potential returns per unit of risk. The Penn National Gaming is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,771 in Penn National Gaming on September 4, 2024 and sell it today you would earn a total of 213.00 from holding Penn National Gaming or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. Penn National Gaming
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Penn National Gaming |
PARKEN Sport and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Penn National
The main advantage of trading using opposite PARKEN Sport and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport 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.| PARKEN Sport vs. LIFEWAY FOODS | PARKEN Sport vs. AUST AGRICULTURAL | PARKEN Sport vs. Lifeway Foods | PARKEN Sport vs. TYSON FOODS A |
| Penn National vs. CARSALESCOM | Penn National vs. Lery Seafood Group | Penn National vs. Dairy Farm International | Penn National vs. COMMERCIAL VEHICLE |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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