Correlation Between Penn National and TOHOKU EL
Can any of the company-specific risk be diversified away by investing in both Penn National and TOHOKU EL 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 TOHOKU EL 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 TOHOKU EL PWR, you can compare the effects of market volatilities on Penn National and TOHOKU EL 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 TOHOKU EL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and TOHOKU EL.
Diversification Opportunities for Penn National and TOHOKU EL
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Penn and TOHOKU is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and TOHOKU EL PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOHOKU EL PWR 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 TOHOKU EL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOHOKU EL PWR has no effect on the direction of Penn National i.e., Penn National and TOHOKU EL go up and down completely randomly.
Pair Corralation between Penn National and TOHOKU EL
Assuming the 90 days horizon Penn National Gaming is expected to generate 0.85 times more return on investment than TOHOKU EL. However, Penn National Gaming is 1.17 times less risky than TOHOKU EL. It trades about -0.04 of its potential returns per unit of risk. TOHOKU EL PWR is currently generating about -0.12 per unit of risk. If you would invest 1,926 in Penn National Gaming on September 13, 2024 and sell it today you would lose (55.00) from holding Penn National Gaming or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penn National Gaming vs. TOHOKU EL PWR
Performance |
| Timeline |
| Penn National Gaming |
| TOHOKU EL PWR |
Penn National and TOHOKU EL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and TOHOKU EL
The main advantage of trading using opposite Penn National and TOHOKU EL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, TOHOKU EL 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 TOHOKU EL will offset losses from the drop in TOHOKU EL's long position.| Penn National vs. Tradegate AG Wertpapierhandelsbank | Penn National vs. The Hanover Insurance | Penn National vs. FUTURE GAMING GRP | Penn National vs. JSC Halyk bank |
| TOHOKU EL vs. FLOW TRADERS LTD | TOHOKU EL vs. CARSALESCOM | TOHOKU EL vs. Canon Marketing Japan | TOHOKU EL vs. Salesforce |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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