Correlation Between METISA Metalrgica and PENN Entertainment,

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

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

Diversification Opportunities for METISA Metalrgica and PENN Entertainment,

0.44

Correlation Coefficient

METISA Metalrgica  PENN Entertainment,

Very weak diversification

The 3 months correlation between METISA and PENN is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense and PENN Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment, and METISA Metalrgica 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 METISA Metalrgica Timboense 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 METISA Metalrgica i.e., METISA Metalrgica and PENN Entertainment, go up and down completely randomly.

Pair Corralation between METISA Metalrgica and PENN Entertainment,

Assuming the 90 days trading horizon METISA Metalrgica Timboense is expected to under-perform the PENN Entertainment,. But the preferred stock apears to be less risky and, when comparing its historical volatility, METISA Metalrgica Timboense is 1.09 times less risky than PENN Entertainment,. The preferred stock trades about -0.04 of its potential returns per unit of risk. The PENN Entertainment, is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  854.00  in PENN Entertainment, on October 25, 2024 and sell it today you would earn a total of  317.00  from holding PENN Entertainment, or generate 37.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.51%
Values	Daily Returns

METISA Metalrgica Timboense  vs.  PENN Entertainment,

METISA Metalrgica

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in METISA Metalrgica Timboense are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, METISA Metalrgica may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PENN Entertainment,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PENN Entertainment, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, PENN Entertainment, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with METISA Metalrgica and PENN Entertainment,

The main advantage of trading using opposite METISA Metalrgica and PENN Entertainment, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METISA Metalrgica 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 METISA Metalrgica Timboense 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.