Correlation Between Penn National and NEW PACIFIC
Can any of the company-specific risk be diversified away by investing in both Penn National and NEW PACIFIC 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 NEW PACIFIC 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 NEW PACIFIC METALS, you can compare the effects of market volatilities on Penn National and NEW PACIFIC 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 NEW PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and NEW PACIFIC.
Diversification Opportunities for Penn National and NEW PACIFIC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Penn and NEW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and NEW PACIFIC METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW PACIFIC METALS 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 NEW PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW PACIFIC METALS has no effect on the direction of Penn National i.e., Penn National and NEW PACIFIC go up and down completely randomly.
Pair Corralation between Penn National and NEW PACIFIC
If you would invest 1,811 in Penn National Gaming on November 5, 2024 and sell it today you would earn a total of 140.00 from holding Penn National Gaming or generate 7.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 4.76% |
Values | Daily Returns |
Penn National Gaming vs. NEW PACIFIC METALS
Performance |
Timeline |
Penn National Gaming |
NEW PACIFIC METALS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Penn National and NEW PACIFIC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Penn National and NEW PACIFIC
The main advantage of trading using opposite Penn National and NEW PACIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, NEW PACIFIC 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 NEW PACIFIC will offset losses from the drop in NEW PACIFIC's long position.Penn National vs. Titan Machinery | Penn National vs. AGRICULTBK HADR25 YC | Penn National vs. SYSTEMAIR AB | Penn National vs. Dairy Farm International |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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