Correlation Between PENN Entertainment, and Iron Mountain
Can any of the company-specific risk be diversified away by investing in both PENN Entertainment, and Iron Mountain 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 Iron Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN Entertainment, and Iron Mountain Incorporated, you can compare the effects of market volatilities on PENN Entertainment, and Iron Mountain 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 Iron Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN Entertainment, and Iron Mountain.
Diversification Opportunities for PENN Entertainment, and Iron Mountain
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between PENN and Iron is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment, and Iron Mountain Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain 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 Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of PENN Entertainment, i.e., PENN Entertainment, and Iron Mountain go up and down completely randomly.
Pair Corralation between PENN Entertainment, and Iron Mountain
Assuming the 90 days trading horizon PENN Entertainment, is expected to generate 0.45 times more return on investment than Iron Mountain. However, PENN Entertainment, is 2.2 times less risky than Iron Mountain. It trades about -0.1 of its potential returns per unit of risk. Iron Mountain Incorporated is currently generating about -0.32 per unit of risk. If you would invest 1,194 in PENN Entertainment, on October 6, 2024 and sell it today you would lose (15.00) from holding PENN Entertainment, or give up 1.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 94.44% |
Values | Daily Returns |
PENN Entertainment, vs. Iron Mountain Incorporated
Performance |
Timeline |
PENN Entertainment, |
Iron Mountain |
PENN Entertainment, and Iron Mountain Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PENN Entertainment, and Iron Mountain
The main advantage of trading using opposite PENN Entertainment, and Iron Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN Entertainment, position performs unexpectedly, Iron Mountain 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 Iron Mountain will offset losses from the drop in Iron Mountain's long position.PENN Entertainment, vs. Taiwan Semiconductor Manufacturing | PENN Entertainment, vs. Apple Inc | PENN Entertainment, vs. Alibaba Group Holding | PENN Entertainment, vs. Microsoft |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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