Correlation Between PENN NATL and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both PENN NATL and EVS Broadcast 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 EVS Broadcast 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 EVS Broadcast Equipment, you can compare the effects of market volatilities on PENN NATL and EVS Broadcast 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 EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and EVS Broadcast.
Diversification Opportunities for PENN NATL and EVS Broadcast
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PENN and EVS is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment 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 EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of PENN NATL i.e., PENN NATL and EVS Broadcast go up and down completely randomly.
Pair Corralation between PENN NATL and EVS Broadcast
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 2.13 times more return on investment than EVS Broadcast. However, PENN NATL is 2.13 times more volatile than EVS Broadcast Equipment. It trades about 0.16 of its potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.07 per unit of risk. If you would invest 1,805 in PENN NATL GAMING on November 6, 2024 and sell it today you would earn a total of 158.00 from holding PENN NATL GAMING or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. EVS Broadcast Equipment
Performance |
| Timeline |
| PENN NATL GAMING |
| EVS Broadcast Equipment |
PENN NATL and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and EVS Broadcast
The main advantage of trading using opposite PENN NATL and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, EVS Broadcast 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 EVS Broadcast will offset losses from the drop in EVS Broadcast's long position.| PENN NATL vs. IMPERIAL TOBACCO | PENN NATL vs. Wizz Air Holdings | PENN NATL vs. RYANAIR HLDGS ADR | PENN NATL vs. NORWEGIAN AIR SHUT |
| EVS Broadcast vs. Gaztransport Technigaz SA | EVS Broadcast vs. SBM OFFSHORE | EVS Broadcast vs. DATADOT TECHNOLOGY | EVS Broadcast vs. DATATEC LTD 2 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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