Correlation Between Penn National and WOORI FIN
Can any of the company-specific risk be diversified away by investing in both Penn National and WOORI FIN 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 National and WOORI FIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penn National Gaming and WOORI FIN GRP, you can compare the effects of market volatilities on Penn National and WOORI FIN 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 National with a short position of WOORI FIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and WOORI FIN.
Diversification Opportunities for Penn National and WOORI FIN
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Penn and WOORI is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and WOORI FIN GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOORI FIN GRP and Penn National 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 National Gaming are associated (or correlated) with WOORI FIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOORI FIN GRP has no effect on the direction of Penn National i.e., Penn National and WOORI FIN go up and down completely randomly.
Pair Corralation between Penn National and WOORI FIN
Assuming the 90 days horizon Penn National Gaming is expected to generate 0.81 times more return on investment than WOORI FIN. However, Penn National Gaming is 1.24 times less risky than WOORI FIN. It trades about 0.08 of its potential returns per unit of risk. WOORI FIN GRP is currently generating about 0.01 per unit of risk. If you would invest 1,759 in Penn National Gaming on September 18, 2024 and sell it today you would earn a total of 213.00 from holding Penn National Gaming or generate 12.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
Penn National Gaming vs. WOORI FIN GRP
Performance |
Timeline |
Penn National Gaming |
WOORI FIN GRP |
Penn National and WOORI FIN Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Penn National and WOORI FIN
The main advantage of trading using opposite Penn National and WOORI FIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, WOORI FIN 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 WOORI FIN will offset losses from the drop in WOORI FIN's long position.Penn National vs. Superior Plus Corp | Penn National vs. SIVERS SEMICONDUCTORS AB | Penn National vs. Norsk Hydro ASA | Penn National vs. Reliance Steel Aluminum |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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