Correlation Between Penn National and MOLSON RS
Can any of the company-specific risk be diversified away by investing in both Penn National and MOLSON RS 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 MOLSON RS 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 MOLSON RS BEVERAGE, you can compare the effects of market volatilities on Penn National and MOLSON RS 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 MOLSON RS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and MOLSON RS.
Diversification Opportunities for Penn National and MOLSON RS
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Penn and MOLSON is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE 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 MOLSON RS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS BEVERAGE has no effect on the direction of Penn National i.e., Penn National and MOLSON RS go up and down completely randomly.
Pair Corralation between Penn National and MOLSON RS
Assuming the 90 days horizon Penn National Gaming is expected to generate 1.48 times more return on investment than MOLSON RS. However, Penn National is 1.48 times more volatile than MOLSON RS BEVERAGE. It trades about 0.11 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about -0.03 per unit of risk. If you would invest 1,775 in Penn National Gaming on October 29, 2024 and sell it today you would earn a total of 112.00 from holding Penn National Gaming or generate 6.31% 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. MOLSON RS BEVERAGE
Performance |
| Timeline |
| Penn National Gaming |
| MOLSON RS BEVERAGE |
Penn National and MOLSON RS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and MOLSON RS
The main advantage of trading using opposite Penn National and MOLSON RS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, MOLSON RS 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 MOLSON RS will offset losses from the drop in MOLSON RS's long position.| Penn National vs. Las Vegas Sands | Penn National vs. Galaxy Entertainment Group | Penn National vs. Sands China | Penn National vs. MGM Resorts International |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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