Correlation Between PENN NATL and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both PENN NATL and GREENX METALS 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 GREENX METALS 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 GREENX METALS LTD, you can compare the effects of market volatilities on PENN NATL and GREENX METALS 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 GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and GREENX METALS.
Diversification Opportunities for PENN NATL and GREENX METALS
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between PENN and GREENX is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD 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 GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of PENN NATL i.e., PENN NATL and GREENX METALS go up and down completely randomly.
Pair Corralation between PENN NATL and GREENX METALS
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 0.64 times more return on investment than GREENX METALS. However, PENN NATL GAMING is 1.57 times less risky than GREENX METALS. It trades about 0.1 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about -0.12 per unit of risk. If you would invest 1,893 in PENN NATL GAMING on September 1, 2024 and sell it today you would earn a total of 90.00 from holding PENN NATL GAMING or generate 4.75% 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. GREENX METALS LTD
Performance |
| Timeline |
| PENN NATL GAMING |
| GREENX METALS LTD |
PENN NATL and GREENX METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and GREENX METALS
The main advantage of trading using opposite PENN NATL and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS'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 |
| GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. NMI Holdings | GREENX METALS vs. Origin Agritech | GREENX METALS vs. SIVERS SEMICONDUCTORS AB |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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