Correlation Between Penn National and Raisio Oyj
Can any of the company-specific risk be diversified away by investing in both Penn National and Raisio Oyj 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 Raisio Oyj 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 Raisio Oyj, you can compare the effects of market volatilities on Penn National and Raisio Oyj 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 Raisio Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Raisio Oyj.
Diversification Opportunities for Penn National and Raisio Oyj
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Penn and Raisio is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Raisio Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raisio Oyj 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 Raisio Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raisio Oyj has no effect on the direction of Penn National i.e., Penn National and Raisio Oyj go up and down completely randomly.
Pair Corralation between Penn National and Raisio Oyj
Given the investment horizon of 90 days Penn National Gaming is expected to under-perform the Raisio Oyj. In addition to that, Penn National is 2.37 times more volatile than Raisio Oyj. It trades about -0.08 of its total potential returns per unit of risk. Raisio Oyj is currently generating about -0.01 per unit of volatility. If you would invest 230.00 in Raisio Oyj on October 8, 2024 and sell it today you would lose (1.00) from holding Raisio Oyj or give up 0.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 84.21% |
Values | Daily Returns |
Penn National Gaming vs. Raisio Oyj
Performance |
Timeline |
Penn National Gaming |
Raisio Oyj |
Penn National and Raisio Oyj Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Penn National and Raisio Oyj
The main advantage of trading using opposite Penn National and Raisio Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, Raisio Oyj 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 Raisio Oyj will offset losses from the drop in Raisio Oyj's long position.Penn National vs. DraftKings | Penn National vs. MGM Resorts International | Penn National vs. Caesars Entertainment | Penn National vs. Boyd Gaming |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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