Correlation Between PT Barito and Penn National
Can any of the company-specific risk be diversified away by investing in both PT Barito 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 PT Barito and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Barito Pacific and Penn National Gaming, you can compare the effects of market volatilities on PT Barito 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 PT Barito with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Barito and Penn National.
Diversification Opportunities for PT Barito and Penn National
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OB8 and Penn is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding PT Barito Pacific 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 PT Barito 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 PT Barito Pacific 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 PT Barito i.e., PT Barito and Penn National go up and down completely randomly.
Pair Corralation between PT Barito and Penn National
Assuming the 90 days horizon PT Barito Pacific is expected to generate 1.12 times more return on investment than Penn National. However, PT Barito is 1.12 times more volatile than Penn National Gaming. It trades about 0.22 of its potential returns per unit of risk. Penn National Gaming is currently generating about 0.14 per unit of risk. If you would invest 4.20 in PT Barito Pacific on October 23, 2024 and sell it today you would earn a total of 0.55 from holding PT Barito Pacific or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Barito Pacific vs. Penn National Gaming
Performance |
| Timeline |
| PT Barito Pacific |
| Penn National Gaming |
PT Barito and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Barito and Penn National
The main advantage of trading using opposite PT Barito and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Barito 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.| PT Barito vs. ELL ENVIRONHLDGS HD 0001 | PT Barito vs. BRIT AMER TOBACCO | PT Barito vs. Air New Zealand | PT Barito vs. Altair Engineering |
| Penn National vs. Apollo Medical Holdings | Penn National vs. Datadog | Penn National vs. MICRONIC MYDATA | Penn National vs. Northern Data AG |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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