Correlation Between Penn National and REYNA SILVER

Can any of the company-specific risk be diversified away by investing in both Penn National and REYNA SILVER 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 National and REYNA SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Penn National Gaming and REYNA SILVER P, you can compare the effects of market volatilities on Penn National and REYNA SILVER 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 National with a short position of REYNA SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and REYNA SILVER.

Diversification Opportunities for Penn National and REYNA SILVER

0.12

Correlation Coefficient

Penn National  REYNA SILVER

Average diversification

The 3 months correlation between Penn and REYNA is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and REYNA SILVER P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REYNA SILVER P and Penn National 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 National Gaming are associated (or correlated) with REYNA SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REYNA SILVER P has no effect on the direction of Penn National i.e., Penn National and REYNA SILVER go up and down completely randomly.

Pair Corralation between Penn National and REYNA SILVER

Given the investment horizon of 90 days Penn National is expected to generate 1.62 times less return on investment than REYNA SILVER. But when comparing it to its historical volatility, Penn National Gaming is 2.7 times less risky than REYNA SILVER. It trades about 0.19 of its potential returns per unit of risk. REYNA SILVER P is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  5.52  in REYNA SILVER P on October 23, 2024 and sell it today you would earn a total of  0.58  from holding REYNA SILVER P or generate 10.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.89%
Values	Daily Returns

Penn National Gaming  vs.  REYNA SILVER P

Penn National Gaming

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Penn National Gaming are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Penn National may actually be approaching a critical reversion point that can send shares even higher in February 2025.

REYNA SILVER P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days REYNA SILVER P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Penn National and REYNA SILVER

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

The idea behind Penn National Gaming and REYNA SILVER P 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.