Correlation Between Allied Gaming and Penn National
Can any of the company-specific risk be diversified away by investing in both Allied Gaming 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 Allied Gaming and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Gaming Entertainment and Penn National Gaming, you can compare the effects of market volatilities on Allied Gaming 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 Allied Gaming with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Gaming and Penn National.
Diversification Opportunities for Allied Gaming and Penn National
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allied and Penn is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Allied Gaming Entertainment 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 Allied Gaming 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 Allied Gaming Entertainment 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 Allied Gaming i.e., Allied Gaming and Penn National go up and down completely randomly.
Pair Corralation between Allied Gaming and Penn National
Given the investment horizon of 90 days Allied Gaming Entertainment is expected to generate 1.56 times more return on investment than Penn National. However, Allied Gaming is 1.56 times more volatile than Penn National Gaming. It trades about 0.06 of its potential returns per unit of risk. Penn National Gaming is currently generating about -0.05 per unit of risk. If you would invest 89.00 in Allied Gaming Entertainment on October 10, 2024 and sell it today you would earn a total of 3.00 from holding Allied Gaming Entertainment or generate 3.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Allied Gaming Entertainment vs. Penn National Gaming
Performance |
Timeline |
Allied Gaming Entert |
Penn National Gaming |
Allied Gaming and Penn National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Allied Gaming and Penn National
The main advantage of trading using opposite Allied Gaming and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Gaming 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.Allied Gaming vs. American Picture House | Allied Gaming vs. Hall of Fame | Allied Gaming vs. New Wave Holdings | Allied Gaming vs. OverActive Media Corp |
Penn National vs. DraftKings | Penn National vs. MGM Resorts International | Penn National vs. Caesars Entertainment | Penn National vs. Boyd Gaming |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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