Correlation Between Penn National and Jpmorgan Europe
Can any of the company-specific risk be diversified away by investing in both Penn National and Jpmorgan Europe 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 Jpmorgan Europe 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 Jpmorgan Europe Dynamic, you can compare the effects of market volatilities on Penn National and Jpmorgan Europe 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 Jpmorgan Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Jpmorgan Europe.
Diversification Opportunities for Penn National and Jpmorgan Europe
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Penn and Jpmorgan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Jpmorgan Europe Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Europe Dynamic 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 Jpmorgan Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Europe Dynamic has no effect on the direction of Penn National i.e., Penn National and Jpmorgan Europe go up and down completely randomly.
Pair Corralation between Penn National and Jpmorgan Europe
Given the investment horizon of 90 days Penn National Gaming is expected to generate 3.88 times more return on investment than Jpmorgan Europe. However, Penn National is 3.88 times more volatile than Jpmorgan Europe Dynamic. It trades about 0.05 of its potential returns per unit of risk. Jpmorgan Europe Dynamic is currently generating about -0.13 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 Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Penn National Gaming vs. Jpmorgan Europe Dynamic
Performance |
Timeline |
Penn National Gaming |
Jpmorgan Europe Dynamic |
Penn National and Jpmorgan Europe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Penn National and Jpmorgan Europe
The main advantage of trading using opposite Penn National and Jpmorgan Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, Jpmorgan Europe 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 Jpmorgan Europe will offset losses from the drop in Jpmorgan Europe'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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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