Correlation Between Penn National and WOORI FIN

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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 Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.44%
ValuesDaily Returns

Penn National Gaming  vs.  WOORI FIN GRP

 Performance 
       Timeline  
Penn National Gaming 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Penn National Gaming are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Penn National reported solid returns over the last few months and may actually be approaching a breakup point.
WOORI FIN GRP 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days WOORI FIN GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, WOORI FIN is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.
The idea behind Penn National Gaming and WOORI FIN GRP 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.
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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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