Correlation Between PENN Entertainment and Japan Asia
Can any of the company-specific risk be diversified away by investing in both PENN Entertainment and Japan Asia 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 Japan Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN Entertainment and Japan Asia Investment, you can compare the effects of market volatilities on PENN Entertainment and Japan Asia 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 Japan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN Entertainment and Japan Asia.
Diversification Opportunities for PENN Entertainment and Japan Asia
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PENN and Japan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment 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 Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of PENN Entertainment i.e., PENN Entertainment and Japan Asia go up and down completely randomly.
Pair Corralation between PENN Entertainment and Japan Asia
Assuming the 90 days trading horizon PENN Entertainment is expected to under-perform the Japan Asia. In addition to that, PENN Entertainment is 1.78 times more volatile than Japan Asia Investment. It trades about -0.07 of its total potential returns per unit of risk. Japan Asia Investment is currently generating about -0.09 per unit of volatility. If you would invest 129.00 in Japan Asia Investment on October 12, 2024 and sell it today you would lose (4.00) from holding Japan Asia Investment or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN Entertainment vs. Japan Asia Investment
Performance |
| Timeline |
| PENN Entertainment |
| Japan Asia Investment |
PENN Entertainment and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN Entertainment and Japan Asia
The main advantage of trading using opposite PENN Entertainment and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN Entertainment position performs unexpectedly, Japan Asia 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 Japan Asia will offset losses from the drop in Japan Asia'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 |
| Japan Asia vs. BOS BETTER ONLINE | Japan Asia vs. CARSALESCOM | Japan Asia vs. MUTUIONLINE | Japan Asia vs. NEWELL RUBBERMAID |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |