Correlation Between Tradegate and Penn National
Can any of the company-specific risk be diversified away by investing in both Tradegate 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 Tradegate and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and Penn National Gaming, you can compare the effects of market volatilities on Tradegate 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 Tradegate with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and Penn National.
Diversification Opportunities for Tradegate and Penn National
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tradegate and Penn is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels 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 Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Tradegate i.e., Tradegate and Penn National go up and down completely randomly.
Pair Corralation between Tradegate and Penn National
Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to generate 0.16 times more return on investment than Penn National. However, Tradegate AG Wertpapierhandelsbank is 6.21 times less risky than Penn National. It trades about -0.19 of its potential returns per unit of risk. Penn National Gaming is currently generating about -0.03 per unit of risk. If you would invest 8,850 in Tradegate AG Wertpapierhandelsbank on September 13, 2024 and sell it today you would lose (150.00) from holding Tradegate AG Wertpapierhandelsbank or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. Penn National Gaming
Performance |
| Timeline |
| Tradegate AG Wertpap |
| Penn National Gaming |
Tradegate and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and Penn National
The main advantage of trading using opposite Tradegate and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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.| Tradegate vs. Superior Plus Corp | Tradegate vs. SIVERS SEMICONDUCTORS AB | Tradegate vs. CHINA HUARONG ENERHD 50 | Tradegate vs. NORDIC HALIBUT AS |
| Penn National vs. Sands China | Penn National vs. Superior Plus Corp | Penn National vs. SIVERS SEMICONDUCTORS AB | Penn National vs. Norsk Hydro ASA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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