Correlation Between VIVA WINE and PENN Entertainment
Can any of the company-specific risk be diversified away by investing in both VIVA WINE and PENN Entertainment 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 VIVA WINE and PENN Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and PENN Entertainment, you can compare the effects of market volatilities on VIVA WINE and PENN Entertainment 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 VIVA WINE with a short position of PENN Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and PENN Entertainment.
Diversification Opportunities for VIVA WINE and PENN Entertainment
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VIVA and PENN is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and PENN Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment and VIVA WINE 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 VIVA WINE GROUP are associated (or correlated) with PENN Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN Entertainment has no effect on the direction of VIVA WINE i.e., VIVA WINE and PENN Entertainment go up and down completely randomly.
Pair Corralation between VIVA WINE and PENN Entertainment
Assuming the 90 days horizon VIVA WINE is expected to generate 3.26 times less return on investment than PENN Entertainment. But when comparing it to its historical volatility, VIVA WINE GROUP is 1.86 times less risky than PENN Entertainment. It trades about 0.07 of its potential returns per unit of risk. PENN Entertainment is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,859 in PENN Entertainment on November 8, 2024 and sell it today you would earn a total of 138.00 from holding PENN Entertainment or generate 7.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
VIVA WINE GROUP vs. PENN Entertainment
Performance |
| Timeline |
| VIVA WINE GROUP |
| PENN Entertainment |
VIVA WINE and PENN Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and PENN Entertainment
The main advantage of trading using opposite VIVA WINE and PENN Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE position performs unexpectedly, PENN Entertainment 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 Entertainment will offset losses from the drop in PENN Entertainment's long position.| VIVA WINE vs. Summit Hotel Properties | VIVA WINE vs. Wyndham Hotels Resorts | VIVA WINE vs. PPHE HOTEL GROUP | VIVA WINE vs. Planet Fitness |
| PENN Entertainment vs. SIVERS SEMICONDUCTORS AB | PENN Entertainment vs. NorAm Drilling AS | PENN Entertainment vs. Volkswagen AG | PENN Entertainment vs. Darden Restaurants |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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