Correlation Between OVERSEA CHINUNSPADR/2 and PENN NATL
Can any of the company-specific risk be diversified away by investing in both OVERSEA CHINUNSPADR/2 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 OVERSEA CHINUNSPADR/2 and PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OVERSEA CHINUNSPADR2 and PENN NATL GAMING, you can compare the effects of market volatilities on OVERSEA CHINUNSPADR/2 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 OVERSEA CHINUNSPADR/2 with a short position of PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of OVERSEA CHINUNSPADR/2 and PENN NATL.
Diversification Opportunities for OVERSEA CHINUNSPADR/2 and PENN NATL
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OVERSEA and PENN is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding OVERSEA CHINUNSPADR2 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 OVERSEA CHINUNSPADR/2 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 OVERSEA CHINUNSPADR2 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 OVERSEA CHINUNSPADR/2 i.e., OVERSEA CHINUNSPADR/2 and PENN NATL go up and down completely randomly.
Pair Corralation between OVERSEA CHINUNSPADR/2 and PENN NATL
Assuming the 90 days trading horizon OVERSEA CHINUNSPADR/2 is expected to generate 1.52 times less return on investment than PENN NATL. But when comparing it to its historical volatility, OVERSEA CHINUNSPADR2 is 2.13 times less risky than PENN NATL. It trades about 0.25 of its potential returns per unit of risk. PENN NATL GAMING is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,829 in PENN NATL GAMING on August 28, 2024 and sell it today you would earn a total of 178.00 from holding PENN NATL GAMING or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OVERSEA CHINUNSPADR2 vs. PENN NATL GAMING
Performance |
| Timeline |
| OVERSEA CHINUNSPADR/2 |
| PENN NATL GAMING |
OVERSEA CHINUNSPADR/2 and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OVERSEA CHINUNSPADR/2 and PENN NATL
The main advantage of trading using opposite OVERSEA CHINUNSPADR/2 and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OVERSEA CHINUNSPADR/2 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.| OVERSEA CHINUNSPADR/2 vs. Genco Shipping Trading | OVERSEA CHINUNSPADR/2 vs. Apollo Investment Corp | OVERSEA CHINUNSPADR/2 vs. REGAL ASIAN INVESTMENTS | OVERSEA CHINUNSPADR/2 vs. SLR Investment Corp |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |