Correlation Between PENN NATL and SILVER BULLET
Can any of the company-specific risk be diversified away by investing in both PENN NATL and SILVER BULLET 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 SILVER BULLET 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 SILVER BULLET DATA, you can compare the effects of market volatilities on PENN NATL and SILVER BULLET 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 SILVER BULLET. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and SILVER BULLET.
Diversification Opportunities for PENN NATL and SILVER BULLET
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PENN and SILVER is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and SILVER BULLET DATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILVER BULLET DATA 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 SILVER BULLET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILVER BULLET DATA has no effect on the direction of PENN NATL i.e., PENN NATL and SILVER BULLET go up and down completely randomly.
Pair Corralation between PENN NATL and SILVER BULLET
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 0.55 times more return on investment than SILVER BULLET. However, PENN NATL GAMING is 1.81 times less risky than SILVER BULLET. It trades about 0.05 of its potential returns per unit of risk. SILVER BULLET DATA is currently generating about -0.02 per unit of risk. If you would invest 1,666 in PENN NATL GAMING on October 17, 2024 and sell it today you would earn a total of 251.00 from holding PENN NATL GAMING or generate 15.07% 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. SILVER BULLET DATA
Performance |
| Timeline |
| PENN NATL GAMING |
| SILVER BULLET DATA |
PENN NATL and SILVER BULLET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and SILVER BULLET
The main advantage of trading using opposite PENN NATL and SILVER BULLET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, SILVER BULLET 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 SILVER BULLET will offset losses from the drop in SILVER BULLET's long position.| PENN NATL vs. TIANDE CHEMICAL | PENN NATL vs. The Hanover Insurance | PENN NATL vs. SILICON LABORATOR | PENN NATL vs. KINGBOARD CHEMICAL |
| SILVER BULLET vs. GAMING FAC SA | SILVER BULLET vs. PENN NATL GAMING | SILVER BULLET vs. GAMESTOP | SILVER BULLET vs. Focus Home Interactive |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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