Correlation Between PENN Entertainment and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both PENN Entertainment and PARKEN Sport 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 PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN Entertainment and PARKEN Sport Entertainment, you can compare the effects of market volatilities on PENN Entertainment and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN Entertainment and PARKEN Sport.
Diversification Opportunities for PENN Entertainment and PARKEN Sport
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PENN and PARKEN is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of PENN Entertainment i.e., PENN Entertainment and PARKEN Sport go up and down completely randomly.
Pair Corralation between PENN Entertainment and PARKEN Sport
Assuming the 90 days trading horizon PENN Entertainment is expected to under-perform the PARKEN Sport. In addition to that, PENN Entertainment is 1.04 times more volatile than PARKEN Sport Entertainment. It trades about -0.07 of its total potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.11 per unit of volatility. If you would invest 1,675 in PARKEN Sport Entertainment on October 12, 2024 and sell it today you would earn a total of 90.00 from holding PARKEN Sport Entertainment or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN Entertainment vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| PENN Entertainment |
| PARKEN Sport Enterta |
PENN Entertainment and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN Entertainment and PARKEN Sport
The main advantage of trading using opposite PENN Entertainment and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN Entertainment position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| PENN Entertainment vs. PARKEN Sport Entertainment | PENN Entertainment vs. SEI INVESTMENTS | PENN Entertainment vs. Japan Asia Investment | PENN Entertainment vs. WisdomTree Investments |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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