Correlation Between Penn National and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both Penn National and ULTRA CLEAN 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 ULTRA CLEAN 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 ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on Penn National and ULTRA CLEAN 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 ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and ULTRA CLEAN.
Diversification Opportunities for Penn National and ULTRA CLEAN
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Penn and ULTRA is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and ULTRA CLEAN HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ULTRA CLEAN HLDGS 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 ULTRA CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ULTRA CLEAN HLDGS has no effect on the direction of Penn National i.e., Penn National and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between Penn National and ULTRA CLEAN
Assuming the 90 days horizon Penn National Gaming is expected to generate 1.61 times more return on investment than ULTRA CLEAN. However, Penn National is 1.61 times more volatile than ULTRA CLEAN HLDGS. It trades about 0.14 of its potential returns per unit of risk. ULTRA CLEAN HLDGS is currently generating about 0.22 per unit of risk. If you would invest 1,781 in Penn National Gaming on October 24, 2024 and sell it today you would earn a total of 130.00 from holding Penn National Gaming or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penn National Gaming vs. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| Penn National Gaming |
| ULTRA CLEAN HLDGS |
Penn National and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and ULTRA CLEAN
The main advantage of trading using opposite Penn National and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, ULTRA CLEAN 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 ULTRA CLEAN will offset losses from the drop in ULTRA CLEAN's long position.| Penn National vs. RYANAIR HLDGS ADR | Penn National vs. United Rentals | Penn National vs. Sixt Leasing SE | Penn National vs. Delta Air Lines |
| ULTRA CLEAN vs. Apple Inc | ULTRA CLEAN vs. Apple Inc | ULTRA CLEAN vs. Apple Inc | ULTRA CLEAN vs. Apple Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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