Correlation Between PENN NATL and MAVEN WIRELESS
Can any of the company-specific risk be diversified away by investing in both PENN NATL and MAVEN WIRELESS 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 MAVEN WIRELESS 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 MAVEN WIRELESS SWEDEN, you can compare the effects of market volatilities on PENN NATL and MAVEN WIRELESS 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 MAVEN WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and MAVEN WIRELESS.
Diversification Opportunities for PENN NATL and MAVEN WIRELESS
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PENN and MAVEN is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN 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 MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of PENN NATL i.e., PENN NATL and MAVEN WIRELESS go up and down completely randomly.
Pair Corralation between PENN NATL and MAVEN WIRELESS
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 1.29 times more return on investment than MAVEN WIRELESS. However, PENN NATL is 1.29 times more volatile than MAVEN WIRELESS SWEDEN. It trades about -0.05 of its potential returns per unit of risk. MAVEN WIRELESS SWEDEN is currently generating about -0.48 per unit of risk. If you would invest 1,907 in PENN NATL GAMING on September 13, 2024 and sell it today you would lose (77.00) from holding PENN NATL GAMING or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. MAVEN WIRELESS SWEDEN
Performance |
| Timeline |
| PENN NATL GAMING |
| MAVEN WIRELESS SWEDEN |
PENN NATL and MAVEN WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and MAVEN WIRELESS
The main advantage of trading using opposite PENN NATL and MAVEN WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, MAVEN WIRELESS 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 MAVEN WIRELESS will offset losses from the drop in MAVEN WIRELESS's long position.The idea behind PENN NATL GAMING and MAVEN WIRELESS SWEDEN pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MAVEN WIRELESS vs. Superior Plus Corp | MAVEN WIRELESS vs. SIVERS SEMICONDUCTORS AB | MAVEN WIRELESS vs. Norsk Hydro ASA | MAVEN WIRELESS vs. Reliance Steel Aluminum |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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