Correlation Between Penn National and ITALIAN WINE
Can any of the company-specific risk be diversified away by investing in both Penn National and ITALIAN WINE 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 ITALIAN WINE 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 ITALIAN WINE BRANDS, you can compare the effects of market volatilities on Penn National and ITALIAN WINE 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 ITALIAN WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and ITALIAN WINE.
Diversification Opportunities for Penn National and ITALIAN WINE
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Penn and ITALIAN is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and ITALIAN WINE BRANDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITALIAN WINE BRANDS 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 ITALIAN WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITALIAN WINE BRANDS has no effect on the direction of Penn National i.e., Penn National and ITALIAN WINE go up and down completely randomly.
Pair Corralation between Penn National and ITALIAN WINE
Assuming the 90 days horizon Penn National is expected to generate 3.99 times less return on investment than ITALIAN WINE. In addition to that, Penn National is 1.88 times more volatile than ITALIAN WINE BRANDS. It trades about 0.0 of its total potential returns per unit of risk. ITALIAN WINE BRANDS is currently generating about 0.02 per unit of volatility. If you would invest 2,066 in ITALIAN WINE BRANDS on September 4, 2024 and sell it today you would earn a total of 174.00 from holding ITALIAN WINE BRANDS or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Penn National Gaming vs. ITALIAN WINE BRANDS
Performance |
| Timeline |
| Penn National Gaming |
| ITALIAN WINE BRANDS |
Penn National and ITALIAN WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and ITALIAN WINE
The main advantage of trading using opposite Penn National and ITALIAN WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, ITALIAN WINE 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 ITALIAN WINE will offset losses from the drop in ITALIAN WINE's long position.| Penn National vs. CARSALESCOM | Penn National vs. Lery Seafood Group | Penn National vs. Dairy Farm International | Penn National vs. COMMERCIAL VEHICLE |
| ITALIAN WINE vs. CHINA TONTINE WINES | ITALIAN WINE vs. Superior Plus Corp | ITALIAN WINE vs. NMI Holdings | ITALIAN WINE vs. Origin Agritech |
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 CEOs Directory module to screen CEOs from public companies around the world.
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