Correlation Between Penn National and Robinhood Markets
Can any of the company-specific risk be diversified away by investing in both Penn National and Robinhood Markets 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 Robinhood Markets 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 Robinhood Markets, you can compare the effects of market volatilities on Penn National and Robinhood Markets 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 Robinhood Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Robinhood Markets.
Diversification Opportunities for Penn National and Robinhood Markets
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Penn and Robinhood is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Robinhood Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robinhood Markets 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 Robinhood Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robinhood Markets has no effect on the direction of Penn National i.e., Penn National and Robinhood Markets go up and down completely randomly.
Pair Corralation between Penn National and Robinhood Markets
Assuming the 90 days horizon Penn National is expected to generate 2.23 times less return on investment than Robinhood Markets. In addition to that, Penn National is 1.04 times more volatile than Robinhood Markets. It trades about 0.2 of its total potential returns per unit of risk. Robinhood Markets is currently generating about 0.46 per unit of volatility. If you would invest 3,743 in Robinhood Markets on October 25, 2024 and sell it today you would earn a total of 1,074 from holding Robinhood Markets or generate 28.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Penn National Gaming vs. Robinhood Markets
Performance |
| Timeline |
| Penn National Gaming |
| Robinhood Markets |
Penn National and Robinhood Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and Robinhood Markets
The main advantage of trading using opposite Penn National and Robinhood Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, Robinhood Markets 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 Robinhood Markets will offset losses from the drop in Robinhood Markets' long position.| Penn National vs. Nufarm Limited | Penn National vs. TITAN MACHINERY | Penn National vs. DAIRY FARM INTL | Penn National vs. Tokyu Construction Co |
| Robinhood Markets vs. Aristocrat Leisure Limited | Robinhood Markets vs. TRAVEL LEISURE DL 01 | Robinhood Markets vs. PRECISION DRILLING P | Robinhood Markets vs. CanSino Biologics |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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