Correlation Between PENN Entertainment, and Multilaser Industrial

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

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

Diversification Opportunities for PENN Entertainment, and Multilaser Industrial

-0.83

Correlation Coefficient

PENN Entertainment,  Multilaser Industrial

Pay attention - limited upside

The 3 months correlation between PENN and Multilaser is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment, and Multilaser Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multilaser Industrial 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 Multilaser Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multilaser Industrial has no effect on the direction of PENN Entertainment, i.e., PENN Entertainment, and Multilaser Industrial go up and down completely randomly.

Pair Corralation between PENN Entertainment, and Multilaser Industrial

Assuming the 90 days trading horizon PENN Entertainment, is expected to generate 0.38 times more return on investment than Multilaser Industrial. However, PENN Entertainment, is 2.65 times less risky than Multilaser Industrial. It trades about 0.12 of its potential returns per unit of risk. Multilaser Industrial SA is currently generating about -0.14 per unit of risk. If you would invest  1,057  in PENN Entertainment, on October 25, 2024 and sell it today you would earn a total of  114.00  from holding PENN Entertainment, or generate 10.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.31%
Values	Daily Returns

PENN Entertainment,  vs.  Multilaser Industrial SA

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.

Multilaser Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Multilaser Industrial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with PENN Entertainment, and Multilaser Industrial

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

The idea behind PENN Entertainment, and Multilaser Industrial SA 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.