Correlation Between Penn National and GCM Mining

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

Diversification Opportunities for Penn National and GCM Mining

-0.61

Correlation Coefficient

Penn National  GCM Mining

Excellent diversification

The 3 months correlation between Penn and GCM is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and GCM Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Mining Corp 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 GCM Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCM Mining Corp has no effect on the direction of Penn National i.e., Penn National and GCM Mining go up and down completely randomly.

Pair Corralation between Penn National and GCM Mining

If you would invest  259.00  in GCM Mining Corp on October 8, 2024 and sell it today you would earn a total of  0.00  from holding GCM Mining Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.26%
Values	Daily Returns

Penn National Gaming  vs.  GCM Mining Corp

Penn National Gaming

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Penn National Gaming are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Penn National is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

GCM Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GCM Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, GCM Mining 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 GCM Mining

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

The idea behind Penn National Gaming and GCM Mining Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.