Correlation Between Penn National and Samui Airport

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

Diversification Opportunities for Penn National and Samui Airport

0.0

Correlation Coefficient

Penn National  Samui Airport

Pay attention - limited upside

The 3 months correlation between Penn and Samui is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Samui Airport Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samui Airport Property 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 Samui Airport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samui Airport Property has no effect on the direction of Penn National i.e., Penn National and Samui Airport go up and down completely randomly.

Pair Corralation between Penn National and Samui Airport

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	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Penn National Gaming  vs.  Samui Airport Property

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.

Samui Airport Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samui Airport Property has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Samui Airport is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Penn National and Samui Airport

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

The idea behind Penn National Gaming and Samui Airport Property 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.