Correlation Between Lerøy Seafood and Penn National
Can any of the company-specific risk be diversified away by investing in both Lerøy Seafood 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 Lerøy Seafood and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lery Seafood Group and Penn National Gaming, you can compare the effects of market volatilities on Lerøy Seafood 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 Lerøy Seafood with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lerøy Seafood and Penn National.
Diversification Opportunities for Lerøy Seafood and Penn National
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lerøy and Penn is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood 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 Lerøy Seafood 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 Lery Seafood 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 Lerøy Seafood i.e., Lerøy Seafood and Penn National go up and down completely randomly.
Pair Corralation between Lerøy Seafood and Penn National
Assuming the 90 days horizon Lery Seafood Group is expected to generate 0.83 times more return on investment than Penn National. However, Lery Seafood Group is 1.2 times less risky than Penn National. It trades about 0.07 of its potential returns per unit of risk. Penn National Gaming is currently generating about 0.02 per unit of risk. If you would invest 429.00 in Lery Seafood Group on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Lery Seafood Group or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lery Seafood Group vs. Penn National Gaming
Performance |
| Timeline |
| Lery Seafood Group |
| Penn National Gaming |
Lerøy Seafood and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lerøy Seafood and Penn National
The main advantage of trading using opposite Lerøy Seafood and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lerøy Seafood 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.| Lerøy Seafood vs. Mowi ASA | Lerøy Seafood vs. LEROY SEAFOOD GRUNSPADR | Lerøy Seafood vs. Yihai International Holding | Lerøy Seafood vs. Lery Seafood Group |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |