Correlation Between FEMALE HEALTH and PENN NATL
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and PENN NATL GAMING, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and PENN NATL.
Diversification Opportunities for FEMALE HEALTH and PENN NATL
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FEMALE and PENN is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and PENN NATL go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and PENN NATL
Assuming the 90 days trading horizon FEMALE HEALTH is expected to generate 1.71 times more return on investment than PENN NATL. However, FEMALE HEALTH is 1.71 times more volatile than PENN NATL GAMING. It trades about 0.18 of its potential returns per unit of risk. PENN NATL GAMING is currently generating about 0.1 per unit of risk. If you would invest 67.00 in FEMALE HEALTH on October 19, 2024 and sell it today you would earn a total of 11.00 from holding FEMALE HEALTH or generate 16.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. PENN NATL GAMING
Performance |
| Timeline |
| FEMALE HEALTH |
| PENN NATL GAMING |
FEMALE HEALTH and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and PENN NATL
The main advantage of trading using opposite FEMALE HEALTH and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. BOSTON BEER A | FEMALE HEALTH vs. Cass Information Systems | FEMALE HEALTH vs. MICRONIC MYDATA | FEMALE HEALTH vs. SAN MIGUEL BREWERY |
| PENN NATL vs. Gaztransport Technigaz SA | PENN NATL vs. United Airlines Holdings | PENN NATL vs. Aegean Airlines SA | PENN NATL vs. American Airlines Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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