Correlation Between PENN Entertainment, and Annaly Capital

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

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

Diversification Opportunities for PENN Entertainment, and Annaly Capital

0.78

Correlation Coefficient

PENN Entertainment,  Annaly Capital

Poor diversification

The 3 months correlation between PENN and Annaly is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment, and Annaly Capital Management, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annaly Capital Manag 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 Annaly Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annaly Capital Manag has no effect on the direction of PENN Entertainment, i.e., PENN Entertainment, and Annaly Capital go up and down completely randomly.

Pair Corralation between PENN Entertainment, and Annaly Capital

Assuming the 90 days trading horizon PENN Entertainment, is expected to generate 1.0 times more return on investment than Annaly Capital. However, PENN Entertainment, is 1.0 times more volatile than Annaly Capital Management,. It trades about 0.12 of its potential returns per unit of risk. Annaly Capital Management, is currently generating about 0.07 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 Together
Strength	Significant
Accuracy	89.66%
Values	Daily Returns

PENN Entertainment,  vs.  Annaly Capital Management,

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.

Annaly Capital Manag

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Annaly Capital Management, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Annaly Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PENN Entertainment, and Annaly Capital

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

The idea behind PENN Entertainment, and Annaly Capital Management, 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.