Correlation Between STMicroelectronics and PENN Entertainment,
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and PENN Entertainment, 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 STMicroelectronics and PENN Entertainment, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and PENN Entertainment,, you can compare the effects of market volatilities on STMicroelectronics and PENN Entertainment, 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 STMicroelectronics with a short position of PENN Entertainment,. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and PENN Entertainment,.
Diversification Opportunities for STMicroelectronics and PENN Entertainment,
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STMicroelectronics and PENN is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and PENN Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment, and STMicroelectronics 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 STMicroelectronics NV are associated (or correlated) with PENN Entertainment,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN Entertainment, has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and PENN Entertainment, go up and down completely randomly.
Pair Corralation between STMicroelectronics and PENN Entertainment,
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the PENN Entertainment,. But the stock apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV is 1.05 times less risky than PENN Entertainment,. The stock trades about -0.04 of its potential returns per unit of risk. The PENN Entertainment, is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,738 in PENN Entertainment, on November 1, 2024 and sell it today you would lose (567.00) from holding PENN Entertainment, or give up 32.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.14% |
| Values | Daily Returns |
STMicroelectronics NV vs. PENN Entertainment,
Performance |
| Timeline |
| STMicroelectronics |
| PENN Entertainment, |
STMicroelectronics and PENN Entertainment, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and PENN Entertainment,
The main advantage of trading using opposite STMicroelectronics and PENN Entertainment, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, PENN Entertainment, 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 Entertainment, will offset losses from the drop in PENN Entertainment,'s long position.| STMicroelectronics vs. Clover Health Investments, | STMicroelectronics vs. British American Tobacco | STMicroelectronics vs. United Airlines Holdings | STMicroelectronics vs. Patria Investments Limited |
| PENN Entertainment, vs. Martin Marietta Materials, | PENN Entertainment, vs. STMicroelectronics NV | PENN Entertainment, vs. Charter Communications | PENN Entertainment, vs. Universal Health Services, |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |