Correlation Between PENN NATL and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both PENN NATL and KRISPY KREME 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 KRISPY KREME 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 KRISPY KREME DL 01, you can compare the effects of market volatilities on PENN NATL and KRISPY KREME 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 KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and KRISPY KREME.
Diversification Opportunities for PENN NATL and KRISPY KREME
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between PENN and KRISPY is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and KRISPY KREME DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRISPY KREME DL 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 KRISPY KREME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRISPY KREME DL has no effect on the direction of PENN NATL i.e., PENN NATL and KRISPY KREME go up and down completely randomly.
Pair Corralation between PENN NATL and KRISPY KREME
Assuming the 90 days trading horizon PENN NATL GAMING is expected to under-perform the KRISPY KREME. In addition to that, PENN NATL is 1.17 times more volatile than KRISPY KREME DL 01. It trades about -0.02 of its total potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about -0.01 per unit of volatility. If you would invest 1,088 in KRISPY KREME DL 01 on October 23, 2024 and sell it today you would lose (263.00) from holding KRISPY KREME DL 01 or give up 24.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
PENN NATL GAMING vs. KRISPY KREME DL 01
Performance |
| Timeline |
| PENN NATL GAMING |
| KRISPY KREME DL |
PENN NATL and KRISPY KREME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and KRISPY KREME
The main advantage of trading using opposite PENN NATL and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, KRISPY KREME 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 KRISPY KREME will offset losses from the drop in KRISPY KREME's long position.| PENN NATL vs. ASM Pacific Technology | PENN NATL vs. Cognizant Technology Solutions | PENN NATL vs. Align Technology | PENN NATL vs. DXC Technology Co |
| KRISPY KREME vs. MagnaChip Semiconductor Corp | KRISPY KREME vs. Hua Hong Semiconductor | KRISPY KREME vs. Taiwan Semiconductor Manufacturing | KRISPY KREME vs. TYSON FOODS A |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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