Correlation Between Penn National and Cass Information
Can any of the company-specific risk be diversified away by investing in both Penn National and Cass Information 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 Cass Information 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 Cass Information Systems, you can compare the effects of market volatilities on Penn National and Cass Information 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 Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Cass Information.
Diversification Opportunities for Penn National and Cass Information
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Penn and Cass is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Cass Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Information Systems 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 Cass Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Information Systems has no effect on the direction of Penn National i.e., Penn National and Cass Information go up and down completely randomly.
Pair Corralation between Penn National and Cass Information
Assuming the 90 days horizon Penn National Gaming is expected to under-perform the Cass Information. In addition to that, Penn National is 1.77 times more volatile than Cass Information Systems. It trades about -0.01 of its total potential returns per unit of risk. Cass Information Systems is currently generating about 0.02 per unit of volatility. If you would invest 4,000 in Cass Information Systems on September 12, 2024 and sell it today you would earn a total of 160.00 from holding Cass Information Systems or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penn National Gaming vs. Cass Information Systems
Performance |
| Timeline |
| Penn National Gaming |
| Cass Information Systems |
Penn National and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and Cass Information
The main advantage of trading using opposite Penn National and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, Cass Information 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 Cass Information will offset losses from the drop in Cass Information's long position.| Penn National vs. Tradegate AG Wertpapierhandelsbank | Penn National vs. The Hanover Insurance | Penn National vs. FUTURE GAMING GRP | Penn National vs. JSC Halyk bank |
| Cass Information vs. Tradegate AG Wertpapierhandelsbank | Cass Information vs. Guidewire Software | Cass Information vs. PT Bank Maybank | Cass Information vs. REVO INSURANCE SPA |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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