Correlation Between Bet At and PENN Entertainment

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

By analyzing existing cross correlation between bet at home AG and PENN Entertainment, you can compare the effects of market volatilities on Bet At 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 Bet At with a short position of PENN Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet At and PENN Entertainment.

Diversification Opportunities for Bet At and PENN Entertainment

0.41

Correlation Coefficient

Bet At  PENN Entertainment

Very weak diversification

The 3 months correlation between Bet and PENN is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and PENN Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment and Bet At 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 bet at home AG 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 Bet At i.e., Bet At and PENN Entertainment go up and down completely randomly.

Pair Corralation between Bet At and PENN Entertainment

Assuming the 90 days trading horizon bet at home AG is expected to generate 1.5 times more return on investment than PENN Entertainment. However, Bet At is 1.5 times more volatile than PENN Entertainment. It trades about 0.05 of its potential returns per unit of risk. PENN Entertainment is currently generating about -0.05 per unit of risk. If you would invest  246.00  in bet at home AG on December 23, 2024 and sell it today you would earn a total of  17.00  from holding bet at home AG or generate 6.91% return on investment over 90 days.

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

bet at home AG  vs.  PENN Entertainment

bet at home

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in bet at home AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Bet At may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PENN Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days PENN Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bet At and PENN Entertainment

The main advantage of trading using opposite Bet At and PENN Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet At 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.

The idea behind bet at home AG and PENN Entertainment 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.