Correlation Between Penn National and TELE2 AB
Can any of the company-specific risk be diversified away by investing in both Penn National and TELE2 AB 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 TELE2 AB 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 TELE2 AB UNSPADR12, you can compare the effects of market volatilities on Penn National and TELE2 AB 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 TELE2 AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and TELE2 AB.
Diversification Opportunities for Penn National and TELE2 AB
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Penn and TELE2 is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and TELE2 AB UNSPADR12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELE2 AB UNSPADR12 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 TELE2 AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELE2 AB UNSPADR12 has no effect on the direction of Penn National i.e., Penn National and TELE2 AB go up and down completely randomly.
Pair Corralation between Penn National and TELE2 AB
Assuming the 90 days horizon Penn National Gaming is expected to under-perform the TELE2 AB. In addition to that, Penn National is 1.11 times more volatile than TELE2 AB UNSPADR12. It trades about -0.01 of its total potential returns per unit of risk. TELE2 AB UNSPADR12 is currently generating about 0.04 per unit of volatility. If you would invest 333.00 in TELE2 AB UNSPADR12 on September 12, 2024 and sell it today you would earn a total of 161.00 from holding TELE2 AB UNSPADR12 or generate 48.35% 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. TELE2 AB UNSPADR12
Performance |
| Timeline |
| Penn National Gaming |
| TELE2 AB UNSPADR12 |
Penn National and TELE2 AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and TELE2 AB
The main advantage of trading using opposite Penn National and TELE2 AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, TELE2 AB 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 TELE2 AB will offset losses from the drop in TELE2 AB's long position.| Penn National vs. Sands China | Penn National vs. Superior Plus Corp | Penn National vs. SIVERS SEMICONDUCTORS AB | Penn National vs. Norsk Hydro ASA |
| TELE2 AB vs. Penn National Gaming | TELE2 AB vs. GameStop Corp | TELE2 AB vs. Boyd Gaming | TELE2 AB vs. Media and Games |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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