Correlation Between GreenTree Hospitality and Penn National
Can any of the company-specific risk be diversified away by investing in both GreenTree Hospitality 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 GreenTree Hospitality and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenTree Hospitality Group and Penn National Gaming, you can compare the effects of market volatilities on GreenTree Hospitality 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 GreenTree Hospitality with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTree Hospitality and Penn National.
Diversification Opportunities for GreenTree Hospitality and Penn National
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GreenTree and Penn is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality Group 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 GreenTree Hospitality 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 GreenTree Hospitality Group 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 GreenTree Hospitality i.e., GreenTree Hospitality and Penn National go up and down completely randomly.
Pair Corralation between GreenTree Hospitality and Penn National
Considering the 90-day investment horizon GreenTree Hospitality Group is expected to under-perform the Penn National. But the stock apears to be less risky and, when comparing its historical volatility, GreenTree Hospitality Group is 1.03 times less risky than Penn National. The stock trades about -0.04 of its potential returns per unit of risk. The Penn National Gaming is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,625 in Penn National Gaming on September 14, 2024 and sell it today you would lose (546.00) from holding Penn National Gaming or give up 20.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenTree Hospitality Group vs. Penn National Gaming
Performance |
| Timeline |
| GreenTree Hospitality |
| Penn National Gaming |
GreenTree Hospitality and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenTree Hospitality and Penn National
The main advantage of trading using opposite GreenTree Hospitality and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTree Hospitality 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.| GreenTree Hospitality vs. Yatra Online | GreenTree Hospitality vs. Mondee Holdings | GreenTree Hospitality vs. MakeMyTrip Limited | GreenTree Hospitality vs. Tuniu Corp |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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