Correlation Between Dell Technologies and PENN Entertainment,

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

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

Diversification Opportunities for Dell Technologies and PENN Entertainment,

-0.54

Correlation Coefficient

Dell Technologies  PENN Entertainment,

Excellent diversification

The 3 months correlation between Dell and PENN is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dell Technologies and PENN Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment, and Dell Technologies 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 Dell Technologies 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 Dell Technologies i.e., Dell Technologies and PENN Entertainment, go up and down completely randomly.

Pair Corralation between Dell Technologies and PENN Entertainment,

Assuming the 90 days trading horizon Dell Technologies is expected to under-perform the PENN Entertainment,. In addition to that, Dell Technologies is 8.02 times more volatile than PENN Entertainment,. It trades about -0.12 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  1,179  in PENN Entertainment, on December 22, 2024 and sell it today you would earn a total of  46.00  from holding PENN Entertainment, or generate 3.9% return on investment over 90 days.

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

Dell Technologies  vs.  PENN Entertainment,

Dell Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dell Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

PENN Entertainment,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PENN Entertainment, are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, PENN Entertainment, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dell Technologies and PENN Entertainment,

The main advantage of trading using opposite Dell Technologies and PENN Entertainment, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dell Technologies 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 Dell Technologies 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 Global Correlations module to find global opportunities by holding instruments from different markets.