Correlation Between PENN NATL and Qurate Retail
Can any of the company-specific risk be diversified away by investing in both PENN NATL and Qurate Retail 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 Qurate Retail 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 Qurate Retail Series, you can compare the effects of market volatilities on PENN NATL and Qurate Retail 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 Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Qurate Retail.
Diversification Opportunities for PENN NATL and Qurate Retail
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PENN and Qurate is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series 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 Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail Series has no effect on the direction of PENN NATL i.e., PENN NATL and Qurate Retail go up and down completely randomly.
Pair Corralation between PENN NATL and Qurate Retail
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 0.7 times more return on investment than Qurate Retail. However, PENN NATL GAMING is 1.43 times less risky than Qurate Retail. It trades about 0.04 of its potential returns per unit of risk. Qurate Retail Series is currently generating about -0.13 per unit of risk. If you would invest 1,630 in PENN NATL GAMING on August 27, 2024 and sell it today you would earn a total of 288.00 from holding PENN NATL GAMING or generate 17.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. Qurate Retail Series
Performance |
| Timeline |
| PENN NATL GAMING |
| Qurate Retail Series |
PENN NATL and Qurate Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Qurate Retail
The main advantage of trading using opposite PENN NATL and Qurate Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, Qurate Retail 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 Qurate Retail will offset losses from the drop in Qurate Retail's long position.The idea behind PENN NATL GAMING and Qurate Retail Series 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.| Qurate Retail vs. MAGNUM MINING EXP | Qurate Retail vs. Cogent Communications Holdings | Qurate Retail vs. Iridium Communications | Qurate Retail vs. Entravision Communications |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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