Correlation Between PENN Entertainment, and Academy Sports
Can any of the company-specific risk be diversified away by investing in both PENN Entertainment, and Academy Sports 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 PENN Entertainment, and Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN Entertainment, and Academy Sports and, you can compare the effects of market volatilities on PENN Entertainment, and Academy Sports 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 PENN Entertainment, with a short position of Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN Entertainment, and Academy Sports.
Diversification Opportunities for PENN Entertainment, and Academy Sports
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between PENN and Academy is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment, and Academy Sports and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports and PENN Entertainment, 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 PENN Entertainment, are associated (or correlated) with Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports has no effect on the direction of PENN Entertainment, i.e., PENN Entertainment, and Academy Sports go up and down completely randomly.
Pair Corralation between PENN Entertainment, and Academy Sports
Assuming the 90 days trading horizon PENN Entertainment, is expected to generate 0.57 times more return on investment than Academy Sports. However, PENN Entertainment, is 1.76 times less risky than Academy Sports. It trades about 0.11 of its potential returns per unit of risk. Academy Sports and is currently generating about 0.04 per unit of risk. If you would invest 1,037 in PENN Entertainment, on October 31, 2024 and sell it today you would earn a total of 134.00 from holding PENN Entertainment, or generate 12.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.53% |
| Values | Daily Returns |
PENN Entertainment, vs. Academy Sports and
Performance |
| Timeline |
| PENN Entertainment, |
| Academy Sports |
PENN Entertainment, and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN Entertainment, and Academy Sports
The main advantage of trading using opposite PENN Entertainment, and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN Entertainment, position performs unexpectedly, Academy Sports 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 Academy Sports will offset losses from the drop in Academy Sports' long position.| PENN Entertainment, vs. Martin Marietta Materials, | PENN Entertainment, vs. STMicroelectronics NV | PENN Entertainment, vs. Charter Communications | PENN Entertainment, vs. Universal Health Services, |
| Academy Sports vs. PENN Entertainment, | Academy Sports vs. UnitedHealth Group Incorporated | Academy Sports vs. Live Nation Entertainment, | Academy Sports vs. Charter 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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