Correlation Between Valero Energy and PENN Entertainment,
Can any of the company-specific risk be diversified away by investing in both Valero Energy 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 Valero Energy and PENN Entertainment, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valero Energy and PENN Entertainment,, you can compare the effects of market volatilities on Valero Energy 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 Valero Energy with a short position of PENN Entertainment,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valero Energy and PENN Entertainment,.
Diversification Opportunities for Valero Energy and PENN Entertainment,
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Valero and PENN is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Valero Energy and PENN Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment, and Valero Energy 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 Valero Energy 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 Valero Energy i.e., Valero Energy and PENN Entertainment, go up and down completely randomly.
Pair Corralation between Valero Energy and PENN Entertainment,
Assuming the 90 days trading horizon Valero Energy is expected to generate 14.13 times more return on investment than PENN Entertainment,. However, Valero Energy is 14.13 times more volatile than PENN Entertainment,. It trades about 0.16 of its potential returns per unit of risk. PENN Entertainment, is currently generating about -0.21 per unit of risk. If you would invest 37,691 in Valero Energy on November 3, 2024 and sell it today you would earn a total of 2,309 from holding Valero Energy or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
Valero Energy vs. PENN Entertainment,
Performance |
| Timeline |
| Valero Energy |
| PENN Entertainment, |
Valero Energy and PENN Entertainment, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valero Energy and PENN Entertainment,
The main advantage of trading using opposite Valero Energy and PENN Entertainment, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valero Energy 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.| Valero Energy vs. Nordon Indstrias Metalrgicas | Valero Energy vs. CVS Health | Valero Energy vs. Metalurgica Gerdau SA | Valero Energy vs. Multilaser Industrial SA |
| PENN Entertainment, vs. Elevance Health, | PENN Entertainment, vs. Apartment Investment and | PENN Entertainment, vs. CVS Health | PENN Entertainment, vs. Academy Sports and |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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