Correlation Between Penn National and KION Group
Can any of the company-specific risk be diversified away by investing in both Penn National and KION Group 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 KION Group 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 KION Group AG, you can compare the effects of market volatilities on Penn National and KION Group 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 KION Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and KION Group.
Diversification Opportunities for Penn National and KION Group
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Penn and KION is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and KION Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KION Group 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 KION Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KION Group AG has no effect on the direction of Penn National i.e., Penn National and KION Group go up and down completely randomly.
Pair Corralation between Penn National and KION Group
Assuming the 90 days horizon Penn National Gaming is expected to generate 2.23 times more return on investment than KION Group. However, Penn National is 2.23 times more volatile than KION Group AG. It trades about -0.02 of its potential returns per unit of risk. KION Group AG is currently generating about -0.41 per unit of risk. If you would invest 1,900 in Penn National Gaming on October 9, 2024 and sell it today you would lose (36.00) from holding Penn National Gaming or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penn National Gaming vs. KION Group AG
Performance |
| Timeline |
| Penn National Gaming |
| KION Group AG |
Penn National and KION Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and KION Group
The main advantage of trading using opposite Penn National and KION Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, KION Group 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 KION Group will offset losses from the drop in KION Group's long position.| Penn National vs. Entain Plc | Penn National vs. Boyd Gaming | Penn National vs. Superior Plus Corp | Penn National vs. NMI Holdings |
| KION Group vs. Aya Gold Silver | KION Group vs. De Grey Mining | KION Group vs. Nippon Light Metal | KION Group vs. ARDAGH METAL PACDL 0001 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |