Correlation Between PENN Entertainment, and Trade Desk
Can any of the company-specific risk be diversified away by investing in both PENN Entertainment, and Trade Desk 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 Trade Desk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN Entertainment, and The Trade Desk, you can compare the effects of market volatilities on PENN Entertainment, and Trade Desk 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 Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN Entertainment, and Trade Desk.
Diversification Opportunities for PENN Entertainment, and Trade Desk
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PENN and Trade is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment, and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk 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 Trade Desk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Desk has no effect on the direction of PENN Entertainment, i.e., PENN Entertainment, and Trade Desk go up and down completely randomly.
Pair Corralation between PENN Entertainment, and Trade Desk
Assuming the 90 days trading horizon PENN Entertainment, is expected to generate 0.07 times more return on investment than Trade Desk. However, PENN Entertainment, is 14.12 times less risky than Trade Desk. It trades about -0.31 of its potential returns per unit of risk. The Trade Desk is currently generating about -0.18 per unit of risk. If you would invest 1,182 in PENN Entertainment, on October 12, 2024 and sell it today you would lose (11.00) from holding PENN Entertainment, or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN Entertainment, vs. The Trade Desk
Performance |
| Timeline |
| PENN Entertainment, |
| Trade Desk |
PENN Entertainment, and Trade Desk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN Entertainment, and Trade Desk
The main advantage of trading using opposite PENN Entertainment, and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN Entertainment, position performs unexpectedly, Trade Desk 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 Trade Desk will offset losses from the drop in Trade Desk's long position.| PENN Entertainment, vs. Micron Technology | PENN Entertainment, vs. Align Technology | PENN Entertainment, vs. Verizon Communications | PENN Entertainment, vs. DXC Technology |
| Trade Desk vs. Live Nation Entertainment, | Trade Desk vs. PENN Entertainment, | Trade Desk vs. SK Telecom Co, | Trade Desk vs. Zoom Video 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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