Correlation Between PENN NATL and Adidas AG
Can any of the company-specific risk be diversified away by investing in both PENN NATL and Adidas AG 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 Adidas AG 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 adidas AG, you can compare the effects of market volatilities on PENN NATL and Adidas AG 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 Adidas AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Adidas AG.
Diversification Opportunities for PENN NATL and Adidas AG
Good diversification
The 3 months correlation between PENN and Adidas is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and adidas AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on adidas AG 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 Adidas AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of adidas AG has no effect on the direction of PENN NATL i.e., PENN NATL and Adidas AG go up and down completely randomly.
Pair Corralation between PENN NATL and Adidas AG
Assuming the 90 days trading horizon PENN NATL GAMING is expected to under-perform the Adidas AG. In addition to that, PENN NATL is 1.68 times more volatile than adidas AG. It trades about -0.02 of its total potential returns per unit of risk. adidas AG is currently generating about 0.06 per unit of volatility. If you would invest 14,769 in adidas AG on October 13, 2024 and sell it today you would earn a total of 9,611 from holding adidas AG or generate 65.08% 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. adidas AG
Performance |
| Timeline |
| PENN NATL GAMING |
| adidas AG |
PENN NATL and Adidas AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Adidas AG
The main advantage of trading using opposite PENN NATL and Adidas AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, Adidas AG 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 Adidas AG will offset losses from the drop in Adidas AG's long position.| PENN NATL vs. The Home Depot | PENN NATL vs. CITY OFFICE REIT | PENN NATL vs. CENTURIA OFFICE REIT | PENN NATL vs. Aedas Homes SA |
| Adidas AG vs. H2O Retailing | Adidas AG vs. PENN NATL GAMING | Adidas AG vs. PICKN PAY STORES | Adidas AG vs. DETALION GAMES SA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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