Correlation Between Qurate Retail and PENN NATL
Can any of the company-specific risk be diversified away by investing in both Qurate Retail 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 Qurate Retail and PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qurate Retail Series and PENN NATL GAMING, you can compare the effects of market volatilities on Qurate Retail 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 Qurate Retail with a short position of PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and PENN NATL.
Diversification Opportunities for Qurate Retail and PENN NATL
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Qurate and PENN is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series 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 Qurate Retail 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 Qurate Retail Series 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 Qurate Retail i.e., Qurate Retail and PENN NATL go up and down completely randomly.
Pair Corralation between Qurate Retail and PENN NATL
Assuming the 90 days trading horizon Qurate Retail Series is expected to under-perform the PENN NATL. In addition to that, Qurate Retail is 1.43 times more volatile than PENN NATL GAMING. It trades about -0.13 of its total potential returns per unit of risk. PENN NATL GAMING is currently generating about 0.04 per unit of volatility. If you would invest 1,630 in PENN NATL GAMING on August 27, 2024 and sell it today you would earn a total of 288.00 from holding PENN NATL GAMING or generate 17.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qurate Retail Series vs. PENN NATL GAMING
Performance |
| Timeline |
| Qurate Retail Series |
| PENN NATL GAMING |
Qurate Retail and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qurate Retail and PENN NATL
The main advantage of trading using opposite Qurate Retail and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail 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.| Qurate Retail vs. MAGNUM MINING EXP | Qurate Retail vs. Cogent Communications Holdings | Qurate Retail vs. Iridium Communications | Qurate Retail vs. Entravision Communications |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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