Correlation Between Media and PENN NATL
Can any of the company-specific risk be diversified away by investing in both Media 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 Media and PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media and Games and PENN NATL GAMING, you can compare the effects of market volatilities on Media 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 Media with a short position of PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and PENN NATL.
Diversification Opportunities for Media and PENN NATL
Very poor diversification
The 3 months correlation between Media and PENN is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games 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 Media 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 Media and Games 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 Media i.e., Media and PENN NATL go up and down completely randomly.
Pair Corralation between Media and PENN NATL
Assuming the 90 days trading horizon Media and Games is expected to generate 1.22 times more return on investment than PENN NATL. However, Media is 1.22 times more volatile than PENN NATL GAMING. It trades about 0.1 of its potential returns per unit of risk. PENN NATL GAMING is currently generating about 0.0 per unit of risk. If you would invest 103.00 in Media and Games on August 31, 2024 and sell it today you would earn a total of 238.00 from holding Media and Games or generate 231.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media and Games vs. PENN NATL GAMING
Performance |
| Timeline |
| Media and Games |
| PENN NATL GAMING |
Media and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media and PENN NATL
The main advantage of trading using opposite Media and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media 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.| Media vs. INFORMATION SVC GRP | Media vs. Bausch Health Companies | Media vs. National Health Investors | Media vs. Automatic Data Processing |
| PENN NATL vs. SERI INDUSTRIAL EO | PENN NATL vs. Arrow Electronics | PENN NATL vs. KIMBALL ELECTRONICS | PENN NATL vs. MCEWEN MINING INC |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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