Correlation Between PENN NATL and GameStop Corp
Can any of the company-specific risk be diversified away by investing in both PENN NATL and GameStop Corp 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 GameStop Corp 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 GameStop Corp, you can compare the effects of market volatilities on PENN NATL and GameStop Corp 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 GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and GameStop Corp.
Diversification Opportunities for PENN NATL and GameStop Corp
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PENN and GameStop is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp 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 GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of PENN NATL i.e., PENN NATL and GameStop Corp go up and down completely randomly.
Pair Corralation between PENN NATL and GameStop Corp
Assuming the 90 days trading horizon PENN NATL is expected to generate 3.1 times less return on investment than GameStop Corp. But when comparing it to its historical volatility, PENN NATL GAMING is 1.84 times less risky than GameStop Corp. It trades about 0.2 of its potential returns per unit of risk. GameStop Corp is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,031 in GameStop Corp on September 2, 2024 and sell it today you would earn a total of 652.00 from holding GameStop Corp or generate 32.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. GameStop Corp
Performance |
| Timeline |
| PENN NATL GAMING |
| GameStop Corp |
PENN NATL and GameStop Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and GameStop Corp
The main advantage of trading using opposite PENN NATL and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, GameStop Corp 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 GameStop Corp will offset losses from the drop in GameStop Corp's long position.| PENN NATL vs. SIVERS SEMICONDUCTORS AB | PENN NATL vs. Darden Restaurants | PENN NATL vs. Reliance Steel Aluminum | PENN NATL vs. Q2M Managementberatung AG |
| GameStop Corp vs. Texas Roadhouse | GameStop Corp vs. BROADSTNET LEADL 00025 | GameStop Corp vs. Nishi Nippon Railroad Co | GameStop Corp vs. CAREER EDUCATION |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |