Correlation Between PENN NATL and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both PENN NATL and Gladstone Investment 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 NATL and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN NATL GAMING and Gladstone Investment, you can compare the effects of market volatilities on PENN NATL and Gladstone Investment 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 NATL with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Gladstone Investment.
Diversification Opportunities for PENN NATL and Gladstone Investment
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PENN and Gladstone is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and PENN NATL 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 NATL GAMING are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of PENN NATL i.e., PENN NATL and Gladstone Investment go up and down completely randomly.
Pair Corralation between PENN NATL and Gladstone Investment
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 1.06 times more return on investment than Gladstone Investment. However, PENN NATL is 1.06 times more volatile than Gladstone Investment. It trades about 0.2 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.1 per unit of risk. If you would invest 1,811 in PENN NATL GAMING on September 2, 2024 and sell it today you would earn a total of 172.00 from holding PENN NATL GAMING or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. Gladstone Investment
Performance |
| Timeline |
| PENN NATL GAMING |
| Gladstone Investment |
PENN NATL and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Gladstone Investment
The main advantage of trading using opposite PENN NATL and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| PENN NATL vs. SIVERS SEMICONDUCTORS AB | PENN NATL vs. Darden Restaurants | PENN NATL vs. Reliance Steel Aluminum | PENN NATL vs. Q2M Managementberatung AG |
| Gladstone Investment vs. Plug Power | Gladstone Investment vs. The Bank of | Gladstone Investment vs. Knowles | Gladstone Investment vs. Onxeo 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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