Correlation Between PENN Entertainment, and Verizon Communications
Can any of the company-specific risk be diversified away by investing in both PENN Entertainment, and Verizon Communications 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 Verizon Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN Entertainment, and Verizon Communications, you can compare the effects of market volatilities on PENN Entertainment, and Verizon Communications 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 Verizon Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN Entertainment, and Verizon Communications.
Diversification Opportunities for PENN Entertainment, and Verizon Communications
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PENN and Verizon is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment, and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications 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 Verizon Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of PENN Entertainment, i.e., PENN Entertainment, and Verizon Communications go up and down completely randomly.
Pair Corralation between PENN Entertainment, and Verizon Communications
If you would invest 1,171 in PENN Entertainment, on November 7, 2024 and sell it today you would earn a total of 0.00 from holding PENN Entertainment, or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
PENN Entertainment, vs. Verizon Communications
Performance |
| Timeline |
| PENN Entertainment, |
| Verizon Communications |
PENN Entertainment, and Verizon Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN Entertainment, and Verizon Communications
The main advantage of trading using opposite PENN Entertainment, and Verizon Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN Entertainment, position performs unexpectedly, Verizon Communications 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 Verizon Communications will offset losses from the drop in Verizon Communications' long position.| PENN Entertainment, vs. Ryanair Holdings plc | PENN Entertainment, vs. Vulcan Materials | PENN Entertainment, vs. Fair Isaac | PENN Entertainment, vs. Verizon Communications |
| Verizon Communications vs. T Mobile | Verizon Communications vs. Vodafone Group Public | Verizon Communications vs. ATT Inc | Verizon Communications vs. Telefnica SA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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