Correlation Between Penn National and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Penn National and Firan Technology 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 National and Firan Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penn National Gaming and Firan Technology Group, you can compare the effects of market volatilities on Penn National and Firan Technology 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 National with a short position of Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Firan Technology.
Diversification Opportunities for Penn National and Firan Technology
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Penn and Firan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology and Penn National 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 National Gaming are associated (or correlated) with Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of Penn National i.e., Penn National and Firan Technology go up and down completely randomly.
Pair Corralation between Penn National and Firan Technology
Assuming the 90 days horizon Penn National is expected to generate 1.79 times less return on investment than Firan Technology. In addition to that, Penn National is 1.42 times more volatile than Firan Technology Group. It trades about 0.02 of its total potential returns per unit of risk. Firan Technology Group is currently generating about 0.04 per unit of volatility. If you would invest 484.00 in Firan Technology Group on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Firan Technology Group or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penn National Gaming vs. Firan Technology Group
Performance |
| Timeline |
| Penn National Gaming |
| Firan Technology |
Penn National and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and Firan Technology
The main advantage of trading using opposite Penn National and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology's long position.| Penn National vs. Sands China | Penn National vs. Superior Plus Corp | Penn National vs. SIVERS SEMICONDUCTORS AB | Penn National vs. Norsk Hydro ASA |
| Firan Technology vs. MELIA HOTELS | Firan Technology vs. IMPERIAL TOBACCO | Firan Technology vs. China Communications Services | Firan Technology vs. MIRAMAR HOTEL INV |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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