Correlation Between PENN NATL and Perusahaan Perseroan

Can any of the company-specific risk be diversified away by investing in both PENN NATL and Perusahaan Perseroan 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 PENN NATL and Perusahaan Perseroan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PENN NATL GAMING and Perusahaan Perseroan PT, you can compare the effects of market volatilities on PENN NATL and Perusahaan Perseroan 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 PENN NATL with a short position of Perusahaan Perseroan. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Perusahaan Perseroan.

Diversification Opportunities for PENN NATL and Perusahaan Perseroan

-0.71

Correlation Coefficient

PENN NATL  Perusahaan Perseroan

Pay attention - limited upside

The 3 months correlation between PENN and Perusahaan is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and Perusahaan Perseroan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perseroan and PENN NATL 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 PENN NATL GAMING are associated (or correlated) with Perusahaan Perseroan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perseroan has no effect on the direction of PENN NATL i.e., PENN NATL and Perusahaan Perseroan go up and down completely randomly.

Pair Corralation between PENN NATL and Perusahaan Perseroan

Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 0.81 times more return on investment than Perusahaan Perseroan. However, PENN NATL GAMING is 1.23 times less risky than Perusahaan Perseroan. It trades about 0.12 of its potential returns per unit of risk. Perusahaan Perseroan PT is currently generating about -0.03 per unit of risk. If you would invest  1,670  in PENN NATL GAMING on September 3, 2024 and sell it today you would earn a total of  313.00  from holding PENN NATL GAMING or generate 18.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

PENN NATL GAMING  vs.  Perusahaan Perseroan PT

PENN NATL GAMING

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PENN NATL GAMING are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, PENN NATL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Perusahaan Perseroan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Perusahaan Perseroan is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PENN NATL and Perusahaan Perseroan

The main advantage of trading using opposite PENN NATL and Perusahaan Perseroan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, Perusahaan Perseroan 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 Perusahaan Perseroan will offset losses from the drop in Perusahaan Perseroan's long position.

The idea behind PENN NATL GAMING and Perusahaan Perseroan PT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.