Correlation Between PENN Entertainment and Casio Computer
Can any of the company-specific risk be diversified away by investing in both PENN Entertainment and Casio Computer 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 Entertainment and Casio Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN Entertainment and Casio Computer CoLtd, you can compare the effects of market volatilities on PENN Entertainment and Casio Computer 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 Entertainment with a short position of Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN Entertainment and Casio Computer.
Diversification Opportunities for PENN Entertainment and Casio Computer
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between PENN and Casio is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd and PENN Entertainment 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 Entertainment are associated (or correlated) with Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of PENN Entertainment i.e., PENN Entertainment and Casio Computer go up and down completely randomly.
Pair Corralation between PENN Entertainment and Casio Computer
Assuming the 90 days trading horizon PENN Entertainment is expected to generate 2.65 times more return on investment than Casio Computer. However, PENN Entertainment is 2.65 times more volatile than Casio Computer CoLtd. It trades about 0.14 of its potential returns per unit of risk. Casio Computer CoLtd is currently generating about -0.02 per unit of risk. If you would invest 1,759 in PENN Entertainment on October 29, 2024 and sell it today you would earn a total of 142.00 from holding PENN Entertainment or generate 8.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN Entertainment vs. Casio Computer CoLtd
Performance |
| Timeline |
| PENN Entertainment |
| Casio Computer CoLtd |
PENN Entertainment and Casio Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN Entertainment and Casio Computer
The main advantage of trading using opposite PENN Entertainment and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN Entertainment position performs unexpectedly, Casio Computer 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 Casio Computer will offset losses from the drop in Casio Computer's long position.| PENN Entertainment vs. Addus HomeCare | PENN Entertainment vs. LANDSEA GREEN MANAGEMENT | PENN Entertainment vs. Cleanaway Waste Management | PENN Entertainment vs. Haier Smart Home |
| Casio Computer vs. Apple Inc | Casio Computer vs. Apple Inc | Casio Computer vs. Samsung Electronics Co | Casio Computer vs. Samsung Electronics Co |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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