Correlation Between Penn National and Sahacogen Public

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

Diversification Opportunities for Penn National and Sahacogen Public

-0.08

Correlation Coefficient

Penn National  Sahacogen Public

Good diversification

The 3 months correlation between Penn and Sahacogen is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Sahacogen Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sahacogen Public 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 Sahacogen Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sahacogen Public has no effect on the direction of Penn National i.e., Penn National and Sahacogen Public go up and down completely randomly.

Pair Corralation between Penn National and Sahacogen Public

Given the investment horizon of 90 days Penn National Gaming is expected to generate 2.01 times more return on investment than Sahacogen Public. However, Penn National is 2.01 times more volatile than Sahacogen Public. It trades about 0.05 of its potential returns per unit of risk. Sahacogen Public is currently generating about -0.06 per unit of risk. If you would invest  1,888  in Penn National Gaming on October 22, 2024 and sell it today you would earn a total of  114.00  from holding Penn National Gaming or generate 6.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Penn National Gaming  vs.  Sahacogen Public

Penn National Gaming

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Penn National Gaming are ranked lower than 3 (%) 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.

Sahacogen Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sahacogen Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Sahacogen Public is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Penn National and Sahacogen Public

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

The idea behind Penn National Gaming and Sahacogen Public 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.