Correlation Between Penn National and Learning Technologies

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

Diversification Opportunities for Penn National and Learning Technologies

-0.19

Correlation Coefficient

Penn National  Learning Technologies

Good diversification

The 3 months correlation between Penn and Learning is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Learning Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Learning Technologies 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 Learning Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Learning Technologies has no effect on the direction of Penn National i.e., Penn National and Learning Technologies go up and down completely randomly.

Pair Corralation between Penn National and Learning Technologies

Given the investment horizon of 90 days Penn National Gaming is expected to generate 2.33 times more return on investment than Learning Technologies. However, Penn National is 2.33 times more volatile than Learning Technologies Group. It trades about 0.05 of its potential returns per unit of risk. Learning Technologies Group is currently generating about 0.08 per unit of risk. If you would invest  1,862  in Penn National Gaming on October 23, 2024 and sell it today you would earn a total of  140.00  from holding Penn National Gaming or generate 7.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Penn National Gaming  vs.  Learning Technologies Group

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.

Learning Technologies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Learning Technologies Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Learning Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Penn National and Learning Technologies

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

The idea behind Penn National Gaming and Learning Technologies Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.