Correlation Between REVO INSURANCE and Penn National
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE 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 REVO INSURANCE and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and Penn National Gaming, you can compare the effects of market volatilities on REVO INSURANCE 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 REVO INSURANCE with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and Penn National.
Diversification Opportunities for REVO INSURANCE and Penn National
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between REVO and Penn is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA 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 REVO INSURANCE 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and Penn National go up and down completely randomly.
Pair Corralation between REVO INSURANCE and Penn National
Assuming the 90 days horizon REVO INSURANCE SPA is expected to generate 1.32 times more return on investment than Penn National. However, REVO INSURANCE is 1.32 times more volatile than Penn National Gaming. It trades about 0.23 of its potential returns per unit of risk. Penn National Gaming is currently generating about 0.06 per unit of risk. If you would invest 1,150 in REVO INSURANCE SPA on November 29, 2024 and sell it today you would earn a total of 130.00 from holding REVO INSURANCE SPA or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. Penn National Gaming
Performance |
| Timeline |
| REVO INSURANCE SPA |
| Penn National Gaming |
REVO INSURANCE and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and Penn National
The main advantage of trading using opposite REVO INSURANCE and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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.| REVO INSURANCE vs. Singapore Telecommunications Limited | REVO INSURANCE vs. Iridium Communications | REVO INSURANCE vs. Hellenic Telecommunications Organization | REVO INSURANCE vs. Verizon Communications |
| Penn National vs. PARKEN SPORT ENT | Penn National vs. PICKN PAY STORES | Penn National vs. COLUMBIA SPORTSWEAR | Penn National vs. Transport International Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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