Correlation Between PENN NATL and Penn National
Can any of the company-specific risk be diversified away by investing in both PENN NATL and Penn National 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 Penn National 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 Penn National Gaming, you can compare the effects of market volatilities on PENN NATL and Penn National 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 Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Penn National.
Diversification Opportunities for PENN NATL and Penn National
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PENN and Penn is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National 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 Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of PENN NATL i.e., PENN NATL and Penn National go up and down completely randomly.
Pair Corralation between PENN NATL and Penn National
Assuming the 90 days trading horizon PENN NATL is expected to generate 1.82 times less return on investment than Penn National. But when comparing it to its historical volatility, PENN NATL GAMING is 1.06 times less risky than Penn National. It trades about 0.1 of its potential returns per unit of risk. Penn National Gaming is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,822 in Penn National Gaming on October 19, 2024 and sell it today you would earn a total of 173.00 from holding Penn National Gaming or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.44% |
| Values | Daily Returns |
PENN NATL GAMING vs. Penn National Gaming
Performance |
| Timeline |
| PENN NATL GAMING |
| Penn National Gaming |
PENN NATL and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Penn National
The main advantage of trading using opposite PENN NATL and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, Penn National 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 Penn National will offset losses from the drop in Penn National's long position.| PENN NATL vs. Gaztransport Technigaz SA | PENN NATL vs. United Airlines Holdings | PENN NATL vs. Aegean Airlines SA | PENN NATL vs. American Airlines Group |
| Penn National vs. GEELY AUTOMOBILE | Penn National vs. WillScot Mobile Mini | Penn National vs. Ribbon Communications | Penn National vs. T Mobile |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |