Correlation Between PENN Entertainment, and Akamai Technologies,

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

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

Diversification Opportunities for PENN Entertainment, and Akamai Technologies,

-0.54

Correlation Coefficient

PENN Entertainment,  Akamai Technologies,

Excellent diversification

The 3 months correlation between PENN and Akamai is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment, and Akamai Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akamai Technologies, and PENN Entertainment, 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 PENN Entertainment, are associated (or correlated) with Akamai Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akamai Technologies, has no effect on the direction of PENN Entertainment, i.e., PENN Entertainment, and Akamai Technologies, go up and down completely randomly.

Pair Corralation between PENN Entertainment, and Akamai Technologies,

Assuming the 90 days trading horizon PENN Entertainment, is expected to generate 0.13 times more return on investment than Akamai Technologies,. However, PENN Entertainment, is 7.93 times less risky than Akamai Technologies,. It trades about 0.15 of its potential returns per unit of risk. Akamai Technologies, is currently generating about -0.09 per unit of risk. If you would invest  1,179  in PENN Entertainment, on December 23, 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

PENN Entertainment,  vs.  Akamai Technologies,

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.

Akamai Technologies,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Akamai 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 forward-looking signals 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.

Pair Trading with PENN Entertainment, and Akamai Technologies,

The main advantage of trading using opposite PENN Entertainment, and Akamai Technologies, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN Entertainment, position performs unexpectedly, Akamai Technologies, 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 Akamai Technologies, will offset losses from the drop in Akamai Technologies,'s long position.

The idea behind PENN Entertainment, and Akamai Technologies, 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.