Correlation Between Penn National and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Penn National and XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC, you can compare the effects of market volatilities on Penn National and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and XLMedia PLC.
Diversification Opportunities for Penn National and XLMedia PLC
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Penn and XLMedia is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Penn National i.e., Penn National and XLMedia PLC go up and down completely randomly.
Pair Corralation between Penn National and XLMedia PLC
If you would invest 1,771 in Penn National Gaming on September 4, 2024 and sell it today you would earn a total of 213.00 from holding Penn National Gaming or generate 12.03% 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. XLMedia PLC
Performance |
| Timeline |
| Penn National Gaming |
| XLMedia PLC |
Penn National and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and XLMedia PLC
The main advantage of trading using opposite Penn National and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Penn National vs. CARSALESCOM | Penn National vs. Lery Seafood Group | Penn National vs. Dairy Farm International | Penn National vs. COMMERCIAL VEHICLE |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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