Correlation Between Citigroup and PENN Entertainment,

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

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

Diversification Opportunities for Citigroup and PENN Entertainment,

0.83

Correlation Coefficient

Citigroup  PENN Entertainment,

Very poor diversification

The 3 months correlation between Citigroup and PENN is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and PENN Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment, and Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and PENN Entertainment, go up and down completely randomly.

Pair Corralation between Citigroup and PENN Entertainment,

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.05 times less return on investment than PENN Entertainment,. In addition to that, Citigroup is 1.17 times more volatile than PENN Entertainment,. It trades about 0.13 of its total potential returns per unit of risk. PENN Entertainment, is currently generating about 0.15 per unit of volatility. If you would invest  1,027  in PENN Entertainment, on October 7, 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	Strong
Accuracy	95.24%
Values	Daily Returns

Citigroup  vs.  PENN Entertainment,

Citigroup

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 Citigroup and PENN Entertainment,

The main advantage of trading using opposite Citigroup and PENN Entertainment, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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 Citigroup 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.