Correlation Between PENN NATL and Mueller Industries
Can any of the company-specific risk be diversified away by investing in both PENN NATL and Mueller Industries 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 Mueller Industries 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 Mueller Industries, you can compare the effects of market volatilities on PENN NATL and Mueller Industries 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 Mueller Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Mueller Industries.
Diversification Opportunities for PENN NATL and Mueller Industries
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PENN and Mueller is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and Mueller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mueller Industries 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 Mueller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mueller Industries has no effect on the direction of PENN NATL i.e., PENN NATL and Mueller Industries go up and down completely randomly.
Pair Corralation between PENN NATL and Mueller Industries
Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 2.63 times more return on investment than Mueller Industries. However, PENN NATL is 2.63 times more volatile than Mueller Industries. It trades about 0.05 of its potential returns per unit of risk. Mueller Industries is currently generating about 0.01 per unit of risk. If you would invest 1,956 in PENN NATL GAMING on October 17, 2024 and sell it today you would earn a total of 36.00 from holding PENN NATL GAMING or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. Mueller Industries
Performance |
| Timeline |
| PENN NATL GAMING |
| Mueller Industries |
PENN NATL and Mueller Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Mueller Industries
The main advantage of trading using opposite PENN NATL and Mueller Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, Mueller Industries 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 Mueller Industries will offset losses from the drop in Mueller Industries' long position.| PENN NATL vs. TIANDE CHEMICAL | PENN NATL vs. The Hanover Insurance | PENN NATL vs. SILICON LABORATOR | PENN NATL vs. KINGBOARD CHEMICAL |
| Mueller Industries vs. PENN NATL GAMING | Mueller Industries vs. Scientific Games | Mueller Industries vs. MOVIE GAMES SA | Mueller Industries vs. De Grey Mining |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |