Correlation Between Penn National and Easy Software
Can any of the company-specific risk be diversified away by investing in both Penn National and Easy Software 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 Easy Software 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 Easy Software AG, you can compare the effects of market volatilities on Penn National and Easy Software 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 Easy Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Easy Software.
Diversification Opportunities for Penn National and Easy Software
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Penn and Easy is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Easy Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easy Software AG 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 Easy Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easy Software AG has no effect on the direction of Penn National i.e., Penn National and Easy Software go up and down completely randomly.
Pair Corralation between Penn National and Easy Software
Assuming the 90 days horizon Penn National is expected to generate 1.42 times less return on investment than Easy Software. In addition to that, Penn National is 1.05 times more volatile than Easy Software AG. It trades about 0.09 of its total potential returns per unit of risk. Easy Software AG is currently generating about 0.13 per unit of volatility. If you would invest 1,470 in Easy Software AG on November 6, 2024 and sell it today you would earn a total of 330.00 from holding Easy Software AG or generate 22.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penn National Gaming vs. Easy Software AG
Performance |
| Timeline |
| Penn National Gaming |
| Easy Software AG |
Penn National and Easy Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and Easy Software
The main advantage of trading using opposite Penn National and Easy Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, Easy Software 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 Easy Software will offset losses from the drop in Easy Software's long position.| Penn National vs. Fukuyama Transporting Co | Penn National vs. Delta Air Lines | Penn National vs. Pentair plc | Penn National vs. BII Railway Transportation |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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