Correlation Between Easy Software and Penn National
Can any of the company-specific risk be diversified away by investing in both Easy Software 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 Easy Software and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and Penn National Gaming, you can compare the effects of market volatilities on Easy Software 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 Easy Software with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and Penn National.
Diversification Opportunities for Easy Software and Penn National
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Easy and Penn is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG 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 Easy Software 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 Easy Software AG 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 Easy Software i.e., Easy Software and Penn National go up and down completely randomly.
Pair Corralation between Easy Software and Penn National
Assuming the 90 days trading horizon Easy Software AG is expected to under-perform the Penn National. In addition to that, Easy Software is 1.06 times more volatile than Penn National Gaming. It trades about -0.08 of its total potential returns per unit of risk. Penn National Gaming is currently generating about 0.11 per unit of volatility. If you would invest 1,775 in Penn National Gaming on October 29, 2024 and sell it today you would earn a total of 112.00 from holding Penn National Gaming or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easy Software AG vs. Penn National Gaming
Performance |
| Timeline |
| Easy Software AG |
| Penn National Gaming |
Easy Software and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and Penn National
The main advantage of trading using opposite Easy Software and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software 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.| Easy Software vs. Air Transport Services | Easy Software vs. Reinsurance Group of | Easy Software vs. Osisko Metals | Easy Software vs. VIENNA INSURANCE GR |
| Penn National vs. Las Vegas Sands | Penn National vs. Galaxy Entertainment Group | Penn National vs. Sands China | Penn National vs. MGM Resorts International |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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