Correlation Between Penn National and IoTeX Network

Can any of the company-specific risk be diversified away by investing in both Penn National and IoTeX Network 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 IoTeX Network 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 IoTeX Network, you can compare the effects of market volatilities on Penn National and IoTeX Network 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 IoTeX Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and IoTeX Network.

Diversification Opportunities for Penn National and IoTeX Network

0.05

Correlation Coefficient

Penn National  IoTeX Network

Significant diversification

The 3 months correlation between Penn and IoTeX is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and IoTeX Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IoTeX Network 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 IoTeX Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IoTeX Network has no effect on the direction of Penn National i.e., Penn National and IoTeX Network go up and down completely randomly.

Pair Corralation between Penn National and IoTeX Network

Given the investment horizon of 90 days Penn National Gaming is expected to generate 0.29 times more return on investment than IoTeX Network. However, Penn National Gaming is 3.46 times less risky than IoTeX Network. It trades about -0.03 of its potential returns per unit of risk. IoTeX Network is currently generating about -0.04 per unit of risk. If you would invest  1,869  in Penn National Gaming on December 27, 2024 and sell it today you would lose (162.00) from holding Penn National Gaming or give up 8.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Penn National Gaming  vs.  IoTeX Network

Penn National Gaming

Risk-Adjusted Performance

Very Weak

Over the last 90 days Penn National Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

IoTeX Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days IoTeX Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for IoTeX Network shareholders.

Pair Trading with Penn National and IoTeX Network

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

The idea behind Penn National Gaming and IoTeX Network 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.