Correlation Between Broadridge Financial and PENN Entertainment,

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

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

Diversification Opportunities for Broadridge Financial and PENN Entertainment,

0.48

Correlation Coefficient

Broadridge Financial  PENN Entertainment,

Very weak diversification

The 3 months correlation between Broadridge and PENN is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Broadridge Financial Solutions and PENN Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment, and Broadridge Financial 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 Broadridge Financial Solutions, 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 Broadridge Financial i.e., Broadridge Financial and PENN Entertainment, go up and down completely randomly.

Pair Corralation between Broadridge Financial and PENN Entertainment,

Assuming the 90 days trading horizon Broadridge Financial is expected to generate 42.38 times less return on investment than PENN Entertainment,. But when comparing it to its historical volatility, Broadridge Financial Solutions, is 35.69 times less risky than PENN Entertainment,. It trades about 0.13 of its potential returns per unit of risk. PENN Entertainment, is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,027  in PENN Entertainment, on October 8, 2024 and sell it today you would earn a total of  152.00  from holding PENN Entertainment, or generate 14.8% return on investment over 90 days.

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

Broadridge Financial Solutions  vs.  PENN Entertainment,

Broadridge Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Broadridge Financial Solutions, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Broadridge Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PENN Entertainment,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PENN Entertainment, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, PENN Entertainment, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Broadridge Financial and PENN Entertainment,

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

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.