Correlation Between PENN NATL and TSOGO SUN
Can any of the company-specific risk be diversified away by investing in both PENN NATL and TSOGO SUN 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 TSOGO SUN 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 TSOGO SUN GAMING, you can compare the effects of market volatilities on PENN NATL and TSOGO SUN 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 TSOGO SUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and TSOGO SUN.
Diversification Opportunities for PENN NATL and TSOGO SUN
Significant diversification
The 3 months correlation between PENN and TSOGO is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and TSOGO SUN GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSOGO SUN GAMING 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 TSOGO SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSOGO SUN GAMING has no effect on the direction of PENN NATL i.e., PENN NATL and TSOGO SUN go up and down completely randomly.
Pair Corralation between PENN NATL and TSOGO SUN
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 1.39 times more return on investment than TSOGO SUN. However, PENN NATL is 1.39 times more volatile than TSOGO SUN GAMING. It trades about 0.1 of its potential returns per unit of risk. TSOGO SUN GAMING is currently generating about 0.07 per unit of risk. If you would invest 1,717 in PENN NATL GAMING on August 28, 2024 and sell it today you would earn a total of 239.00 from holding PENN NATL GAMING or generate 13.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
PENN NATL GAMING vs. TSOGO SUN GAMING
Performance |
| Timeline |
| PENN NATL GAMING |
| TSOGO SUN GAMING |
PENN NATL and TSOGO SUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and TSOGO SUN
The main advantage of trading using opposite PENN NATL and TSOGO SUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, TSOGO SUN 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 TSOGO SUN will offset losses from the drop in TSOGO SUN's long position.The idea behind PENN NATL GAMING and TSOGO SUN GAMING pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TSOGO SUN vs. Superior Plus Corp | TSOGO SUN vs. NMI Holdings | TSOGO SUN vs. Origin Agritech | TSOGO SUN vs. SIVERS SEMICONDUCTORS AB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |