Correlation Between Penn National and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Penn National and PARKEN Sport 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 PARKEN Sport 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 PARKEN Sport Entertainment, you can compare the effects of market volatilities on Penn National and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and PARKEN Sport.
Diversification Opportunities for Penn National and PARKEN Sport
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Penn and PARKEN is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Penn National i.e., Penn National and PARKEN Sport go up and down completely randomly.
Pair Corralation between Penn National and PARKEN Sport
Assuming the 90 days horizon Penn National Gaming is expected to generate 1.8 times more return on investment than PARKEN Sport. However, Penn National is 1.8 times more volatile than PARKEN Sport Entertainment. It trades about 0.21 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about -0.02 per unit of risk. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penn National Gaming vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Penn National Gaming |
| PARKEN Sport Enterta |
Penn National and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and PARKEN Sport
The main advantage of trading using opposite Penn National and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| Penn National vs. CARSALESCOM | Penn National vs. Lery Seafood Group | Penn National vs. Dairy Farm International | Penn National vs. COMMERCIAL VEHICLE |
| PARKEN Sport vs. LIFEWAY FOODS | PARKEN Sport vs. AUST AGRICULTURAL | PARKEN Sport vs. Lifeway Foods | PARKEN Sport vs. TYSON FOODS A |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |