Correlation Between PENN NATL and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both PENN NATL and GOLD ROAD 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 GOLD ROAD 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 GOLD ROAD RES, you can compare the effects of market volatilities on PENN NATL and GOLD ROAD 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 GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and GOLD ROAD.
Diversification Opportunities for PENN NATL and GOLD ROAD
Significant diversification
The 3 months correlation between PENN and GOLD is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of PENN NATL i.e., PENN NATL and GOLD ROAD go up and down completely randomly.
Pair Corralation between PENN NATL and GOLD ROAD
Assuming the 90 days trading horizon PENN NATL GAMING is expected to under-perform the GOLD ROAD. In addition to that, PENN NATL is 1.32 times more volatile than GOLD ROAD RES. It trades about -0.02 of its total potential returns per unit of risk. GOLD ROAD RES is currently generating about 0.3 per unit of volatility. If you would invest 113.00 in GOLD ROAD RES on October 30, 2024 and sell it today you would earn a total of 34.00 from holding GOLD ROAD RES or generate 30.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. GOLD ROAD RES
Performance |
| Timeline |
| PENN NATL GAMING |
| GOLD ROAD RES |
PENN NATL and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and GOLD ROAD
The main advantage of trading using opposite PENN NATL and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.| PENN NATL vs. MACOM Technology Solutions | PENN NATL vs. Alliance Data Systems | PENN NATL vs. SCOTT TECHNOLOGY | PENN NATL vs. Kingdee International Software |
| GOLD ROAD vs. Sims Metal Management | GOLD ROAD vs. Q2M Managementberatung AG | GOLD ROAD vs. DeVry Education Group | GOLD ROAD vs. CLOVER HEALTH INV |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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