Correlation Between PENN NATL and International Game
Can any of the company-specific risk be diversified away by investing in both PENN NATL and International Game 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 International Game 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 International Game Technology, you can compare the effects of market volatilities on PENN NATL and International Game 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 International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and International Game.
Diversification Opportunities for PENN NATL and International Game
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between PENN and International is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game 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 International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of PENN NATL i.e., PENN NATL and International Game go up and down completely randomly.
Pair Corralation between PENN NATL and International Game
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 0.94 times more return on investment than International Game. However, PENN NATL GAMING is 1.06 times less risky than International Game. It trades about 0.15 of its potential returns per unit of risk. International Game Technology is currently generating about -0.11 per unit of risk. If you would invest 1,832 in PENN NATL GAMING on August 30, 2024 and sell it today you would earn a total of 154.00 from holding PENN NATL GAMING or generate 8.41% 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. International Game Technology
Performance |
| Timeline |
| PENN NATL GAMING |
| International Game |
PENN NATL and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and International Game
The main advantage of trading using opposite PENN NATL and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.| PENN NATL vs. COSMOSTEEL HLDGS | PENN NATL vs. LEGACY IRON ORE | PENN NATL vs. Mitsubishi Gas Chemical | PENN NATL vs. Tianjin Capital Environmental |
| International Game vs. Playa Hotels Resorts | International Game vs. Summit Hotel Properties | International Game vs. MELIA HOTELS | International Game vs. Platinum Investment Management |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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