Correlation Between PENN NATL and QUEEN S
Can any of the company-specific risk be diversified away by investing in both PENN NATL and QUEEN S 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 QUEEN S 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 QUEEN S ROAD, you can compare the effects of market volatilities on PENN NATL and QUEEN S 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 QUEEN S. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and QUEEN S.
Diversification Opportunities for PENN NATL and QUEEN S
Weak diversification
The 3 months correlation between PENN and QUEEN is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD 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 QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of PENN NATL i.e., PENN NATL and QUEEN S go up and down completely randomly.
Pair Corralation between PENN NATL and QUEEN S
Assuming the 90 days trading horizon PENN NATL GAMING is expected to under-perform the QUEEN S. But the stock apears to be less risky and, when comparing its historical volatility, PENN NATL GAMING is 1.22 times less risky than QUEEN S. The stock trades about -0.02 of its potential returns per unit of risk. The QUEEN S ROAD is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 45.00 in QUEEN S ROAD on October 11, 2024 and sell it today you would earn a total of 1.00 from holding QUEEN S ROAD or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. QUEEN S ROAD
Performance |
| Timeline |
| PENN NATL GAMING |
| QUEEN S ROAD |
PENN NATL and QUEEN S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and QUEEN S
The main advantage of trading using opposite PENN NATL and QUEEN S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, QUEEN S 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 QUEEN S will offset losses from the drop in QUEEN S's long position.| PENN NATL vs. Caseys General Stores | PENN NATL vs. Agilent Technologies | PENN NATL vs. Amkor Technology | PENN NATL vs. Costco Wholesale Corp |
| QUEEN S vs. INTERSHOP Communications Aktiengesellschaft | QUEEN S vs. PENN NATL GAMING | QUEEN S vs. Entravision Communications | QUEEN S vs. HOCHSCHILD MINING |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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