Correlation Between Urban Outfitters and PENN NATL
Can any of the company-specific risk be diversified away by investing in both Urban Outfitters and PENN NATL 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 Urban Outfitters and PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urban Outfitters and PENN NATL GAMING, you can compare the effects of market volatilities on Urban Outfitters and PENN NATL 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 Urban Outfitters with a short position of PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Outfitters and PENN NATL.
Diversification Opportunities for Urban Outfitters and PENN NATL
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Urban and PENN is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Urban Outfitters and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING and Urban Outfitters 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 Urban Outfitters are associated (or correlated) with PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of Urban Outfitters i.e., Urban Outfitters and PENN NATL go up and down completely randomly.
Pair Corralation between Urban Outfitters and PENN NATL
Assuming the 90 days horizon Urban Outfitters is expected to generate 9.05 times less return on investment than PENN NATL. But when comparing it to its historical volatility, Urban Outfitters is 1.54 times less risky than PENN NATL. It trades about 0.04 of its potential returns per unit of risk. PENN NATL GAMING is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,769 in PENN NATL GAMING on October 20, 2024 and sell it today you would earn a total of 207.00 from holding PENN NATL GAMING or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Urban Outfitters vs. PENN NATL GAMING
Performance |
| Timeline |
| Urban Outfitters |
| PENN NATL GAMING |
Urban Outfitters and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Outfitters and PENN NATL
The main advantage of trading using opposite Urban Outfitters and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Outfitters position performs unexpectedly, PENN NATL 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 NATL will offset losses from the drop in PENN NATL's long position.| Urban Outfitters vs. Columbia Sportswear | Urban Outfitters vs. CVR Medical Corp | Urban Outfitters vs. ONWARD MEDICAL BV | Urban Outfitters vs. TRAVEL LEISURE DL 01 |
| PENN NATL vs. ITALIAN WINE BRANDS | PENN NATL vs. Zoom Video Communications | PENN NATL vs. FIH MOBILE | PENN NATL vs. Geely Automobile Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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