Correlation Between PENN NATL and Linedata Services
Can any of the company-specific risk be diversified away by investing in both PENN NATL and Linedata Services 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 Linedata Services 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 Linedata Services SA, you can compare the effects of market volatilities on PENN NATL and Linedata Services 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 Linedata Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Linedata Services.
Diversification Opportunities for PENN NATL and Linedata Services
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PENN and Linedata is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and Linedata Services SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linedata Services 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 Linedata Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linedata Services has no effect on the direction of PENN NATL i.e., PENN NATL and Linedata Services go up and down completely randomly.
Pair Corralation between PENN NATL and Linedata Services
Assuming the 90 days trading horizon PENN NATL GAMING is expected to under-perform the Linedata Services. In addition to that, PENN NATL is 2.08 times more volatile than Linedata Services SA. It trades about -0.05 of its total potential returns per unit of risk. Linedata Services SA is currently generating about 0.1 per unit of volatility. If you would invest 7,620 in Linedata Services SA on November 3, 2024 and sell it today you would earn a total of 420.00 from holding Linedata Services SA or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. Linedata Services SA
Performance |
| Timeline |
| PENN NATL GAMING |
| Linedata Services |
PENN NATL and Linedata Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Linedata Services
The main advantage of trading using opposite PENN NATL and Linedata Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, Linedata Services 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 Linedata Services will offset losses from the drop in Linedata Services' long position.| PENN NATL vs. MAVEN WIRELESS SWEDEN | PENN NATL vs. Virtu Financial | PENN NATL vs. SOCKET MOBILE NEW | PENN NATL vs. Geely Automobile Holdings |
| Linedata Services vs. FORMPIPE SOFTWARE AB | Linedata Services vs. UPDATE SOFTWARE | Linedata Services vs. OPERA SOFTWARE | Linedata Services vs. Easy Software AG |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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