Correlation Between Wayside Technology and Penn National
Can any of the company-specific risk be diversified away by investing in both Wayside Technology and Penn National 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 Wayside Technology and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wayside Technology Group and Penn National Gaming, you can compare the effects of market volatilities on Wayside Technology and Penn National 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 Wayside Technology with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wayside Technology and Penn National.
Diversification Opportunities for Wayside Technology and Penn National
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wayside and Penn is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Wayside Technology Group and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National Gaming and Wayside Technology 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 Wayside Technology Group are associated (or correlated) with Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of Wayside Technology i.e., Wayside Technology and Penn National go up and down completely randomly.
Pair Corralation between Wayside Technology and Penn National
Assuming the 90 days horizon Wayside Technology Group is expected to generate 1.09 times more return on investment than Penn National. However, Wayside Technology is 1.09 times more volatile than Penn National Gaming. It trades about 0.13 of its potential returns per unit of risk. Penn National Gaming is currently generating about 0.09 per unit of risk. If you would invest 10,086 in Wayside Technology Group on November 6, 2024 and sell it today you would earn a total of 2,414 from holding Wayside Technology Group or generate 23.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.31% |
| Values | Daily Returns |
Wayside Technology Group vs. Penn National Gaming
Performance |
| Timeline |
| Wayside Technology |
| Penn National Gaming |
Wayside Technology and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wayside Technology and Penn National
The main advantage of trading using opposite Wayside Technology and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayside Technology position performs unexpectedly, Penn National 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 Penn National will offset losses from the drop in Penn National's long position.| Wayside Technology vs. COPLAND ROAD CAPITAL | Wayside Technology vs. Sunstone Hotel Investors | Wayside Technology vs. PPHE HOTEL GROUP | Wayside Technology vs. Yuexiu Transport Infrastructure |
| Penn National vs. Fukuyama Transporting Co | Penn National vs. Delta Air Lines | Penn National vs. Pentair plc | Penn National vs. BII Railway Transportation |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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