Correlation Between PENN NATL and Addtech AB
Can any of the company-specific risk be diversified away by investing in both PENN NATL and Addtech AB 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 Addtech AB 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 Addtech AB, you can compare the effects of market volatilities on PENN NATL and Addtech AB 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 Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Addtech AB.
Diversification Opportunities for PENN NATL and Addtech AB
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between PENN and Addtech is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB 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 Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of PENN NATL i.e., PENN NATL and Addtech AB go up and down completely randomly.
Pair Corralation between PENN NATL and Addtech AB
Assuming the 90 days trading horizon PENN NATL GAMING is expected to under-perform the Addtech AB. In addition to that, PENN NATL is 1.36 times more volatile than Addtech AB. It trades about -0.01 of its total potential returns per unit of risk. Addtech AB is currently generating about 0.09 per unit of volatility. If you would invest 1,086 in Addtech AB on October 11, 2024 and sell it today you would earn a total of 1,568 from holding Addtech AB or generate 144.38% 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. Addtech AB
Performance |
| Timeline |
| PENN NATL GAMING |
| Addtech AB |
PENN NATL and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Addtech AB
The main advantage of trading using opposite PENN NATL and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, Addtech AB 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 Addtech AB will offset losses from the drop in Addtech AB's long position.| PENN NATL vs. Japan Tobacco | PENN NATL vs. ENVVENO MEDICAL DL 00001 | PENN NATL vs. CompuGroup Medical SE | PENN NATL vs. JAPAN TOBACCO UNSPADR12 |
| Addtech AB vs. GameStop Corp | Addtech AB vs. Marie Brizard Wine | Addtech AB vs. PENN NATL GAMING | Addtech AB vs. OURGAME INTHOLDL 00005 |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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