Correlation Between PENN NATL and Apple
Can any of the company-specific risk be diversified away by investing in both PENN NATL and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on PENN NATL and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Apple.
Diversification Opportunities for PENN NATL and Apple
Poor diversification
The 3 months correlation between PENN and Apple is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of PENN NATL i.e., PENN NATL and Apple go up and down completely randomly.
Pair Corralation between PENN NATL and Apple
Assuming the 90 days trading horizon PENN NATL GAMING is expected to under-perform the Apple. In addition to that, PENN NATL is 2.18 times more volatile than Apple Inc. It trades about -0.01 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.08 per unit of volatility. If you would invest 13,439 in Apple Inc on August 30, 2024 and sell it today you would earn a total of 8,756 from holding Apple Inc or generate 65.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. Apple Inc
Performance |
| Timeline |
| PENN NATL GAMING |
| Apple Inc |
PENN NATL and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Apple
The main advantage of trading using opposite PENN NATL and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple'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 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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