Correlation Between PENN Entertainment, and SK Telecom
Can any of the company-specific risk be diversified away by investing in both PENN Entertainment, and SK Telecom 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 SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN Entertainment, and SK Telecom Co,, you can compare the effects of market volatilities on PENN Entertainment, and SK Telecom 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 SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN Entertainment, and SK Telecom.
Diversification Opportunities for PENN Entertainment, and SK Telecom
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PENN and S1KM34 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment, and SK Telecom Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom Co, 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 SK Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Telecom Co, has no effect on the direction of PENN Entertainment, i.e., PENN Entertainment, and SK Telecom go up and down completely randomly.
Pair Corralation between PENN Entertainment, and SK Telecom
Assuming the 90 days trading horizon PENN Entertainment, is expected to generate 0.07 times more return on investment than SK Telecom. However, PENN Entertainment, is 14.98 times less risky than SK Telecom. It trades about -0.22 of its potential returns per unit of risk. SK Telecom Co, is currently generating about -0.1 per unit of risk. If you would invest 1,179 in PENN Entertainment, on October 28, 2024 and sell it today you would lose (8.00) from holding PENN Entertainment, or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN Entertainment, vs. SK Telecom Co,
Performance |
| Timeline |
| PENN Entertainment, |
| SK Telecom Co, |
PENN Entertainment, and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN Entertainment, and SK Telecom
The main advantage of trading using opposite PENN Entertainment, and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN Entertainment, position performs unexpectedly, SK Telecom 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 SK Telecom will offset losses from the drop in SK Telecom's long position.| PENN Entertainment, vs. Liberty Broadband | PENN Entertainment, vs. Credit Acceptance | PENN Entertainment, vs. Capital One Financial | PENN Entertainment, vs. Fresenius Medical Care |
| SK Telecom vs. Westinghouse Air Brake | SK Telecom vs. United Airlines Holdings | SK Telecom vs. Live Nation Entertainment, | SK Telecom vs. TAL Education Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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