Correlation Between Penn National and Industrias Penoles
Can any of the company-specific risk be diversified away by investing in both Penn National and Industrias Penoles 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 Industrias Penoles 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 Industrias Penoles Sab, you can compare the effects of market volatilities on Penn National and Industrias Penoles 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 Industrias Penoles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Industrias Penoles.
Diversification Opportunities for Penn National and Industrias Penoles
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Penn and Industrias is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Industrias Penoles Sab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrias Penoles Sab 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 Industrias Penoles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrias Penoles Sab has no effect on the direction of Penn National i.e., Penn National and Industrias Penoles go up and down completely randomly.
Pair Corralation between Penn National and Industrias Penoles
Assuming the 90 days horizon Penn National Gaming is expected to generate 0.62 times more return on investment than Industrias Penoles. However, Penn National Gaming is 1.61 times less risky than Industrias Penoles. It trades about 0.18 of its potential returns per unit of risk. Industrias Penoles Sab is currently generating about -0.03 per unit of risk. If you would invest 1,798 in Penn National Gaming on September 2, 2024 and sell it today you would earn a total of 186.00 from holding Penn National Gaming or generate 10.34% 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. Industrias Penoles Sab
Performance |
| Timeline |
| Penn National Gaming |
| Industrias Penoles Sab |
Penn National and Industrias Penoles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and Industrias Penoles
The main advantage of trading using opposite Penn National and Industrias Penoles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, Industrias Penoles 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 Industrias Penoles will offset losses from the drop in Industrias Penoles' long position.| Penn National vs. Superior Plus Corp | Penn National vs. NMI Holdings | Penn National vs. Origin Agritech | Penn National vs. SIVERS SEMICONDUCTORS AB |
| Industrias Penoles vs. DEVRY EDUCATION GRP | Industrias Penoles vs. Perdoceo Education | Industrias Penoles vs. Media and Games | Industrias Penoles vs. Penn National Gaming |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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