Correlation Between Penn National and MONGOLIA ENERG
Can any of the company-specific risk be diversified away by investing in both Penn National and MONGOLIA ENERG 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 MONGOLIA ENERG 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 MONGOLIA ENERG HD 02, you can compare the effects of market volatilities on Penn National and MONGOLIA ENERG 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 MONGOLIA ENERG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and MONGOLIA ENERG.
Diversification Opportunities for Penn National and MONGOLIA ENERG
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Penn and MONGOLIA is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and MONGOLIA ENERG HD 02 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONGOLIA ENERG HD 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 MONGOLIA ENERG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONGOLIA ENERG HD has no effect on the direction of Penn National i.e., Penn National and MONGOLIA ENERG go up and down completely randomly.
Pair Corralation between Penn National and MONGOLIA ENERG
Assuming the 90 days horizon Penn National is expected to generate 18.35 times less return on investment than MONGOLIA ENERG. But when comparing it to its historical volatility, Penn National Gaming is 2.53 times less risky than MONGOLIA ENERG. It trades about 0.01 of its potential returns per unit of risk. MONGOLIA ENERG HD 02 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.55 in MONGOLIA ENERG HD 02 on September 3, 2024 and sell it today you would earn a total of 2.90 from holding MONGOLIA ENERG HD 02 or generate 63.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penn National Gaming vs. MONGOLIA ENERG HD 02
Performance |
| Timeline |
| Penn National Gaming |
| MONGOLIA ENERG HD |
Penn National and MONGOLIA ENERG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and MONGOLIA ENERG
The main advantage of trading using opposite Penn National and MONGOLIA ENERG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, MONGOLIA ENERG 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 MONGOLIA ENERG will offset losses from the drop in MONGOLIA ENERG's long position.| Penn National vs. CHINA TONTINE WINES | Penn National vs. Ross Stores | Penn National vs. RETAIL FOOD GROUP | Penn National vs. Costco Wholesale Corp |
| MONGOLIA ENERG vs. Evolution Mining Limited | MONGOLIA ENERG vs. QBE Insurance Group | MONGOLIA ENERG vs. Harmony Gold Mining | MONGOLIA ENERG vs. Commonwealth Bank of |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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