Correlation Between Playstudios and Penn National
Can any of the company-specific risk be diversified away by investing in both Playstudios 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 Playstudios and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playstudios and Penn National Gaming, you can compare the effects of market volatilities on Playstudios 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 Playstudios with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playstudios and Penn National.
Diversification Opportunities for Playstudios and Penn National
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Playstudios and Penn is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Playstudios 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 Playstudios 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 Playstudios 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 Playstudios i.e., Playstudios and Penn National go up and down completely randomly.
Pair Corralation between Playstudios and Penn National
Given the investment horizon of 90 days Playstudios is expected to under-perform the Penn National. In addition to that, Playstudios is 1.04 times more volatile than Penn National Gaming. It trades about -0.03 of its total potential returns per unit of risk. Penn National Gaming is currently generating about -0.01 per unit of volatility. If you would invest 3,120 in Penn National Gaming on November 9, 2024 and sell it today you would lose (1,024) from holding Penn National Gaming or give up 32.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playstudios vs. Penn National Gaming
Performance |
| Timeline |
| Playstudios |
| Penn National Gaming |
Playstudios and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playstudios and Penn National
The main advantage of trading using opposite Playstudios and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playstudios 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.| Playstudios vs. SohuCom | Playstudios vs. Snail, Class A | Playstudios vs. Playtika Holding Corp | Playstudios vs. Golden Matrix Group |
| Penn National vs. DraftKings | Penn National vs. MGM Resorts International | Penn National vs. Caesars Entertainment | Penn National vs. Boyd Gaming |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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