Correlation Between PENN NATL and ACCSYS TECHPLC

Can any of the company-specific risk be diversified away by investing in both PENN NATL and ACCSYS TECHPLC 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 NATL and ACCSYS TECHPLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PENN NATL GAMING and ACCSYS TECHPLC EO, you can compare the effects of market volatilities on PENN NATL and ACCSYS TECHPLC 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 NATL with a short position of ACCSYS TECHPLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and ACCSYS TECHPLC.

Diversification Opportunities for PENN NATL and ACCSYS TECHPLC

-0.3

Correlation Coefficient

PENN NATL  ACCSYS TECHPLC

Very good diversification

The 3 months correlation between PENN and ACCSYS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and ACCSYS TECHPLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCSYS TECHPLC EO and PENN NATL 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 NATL GAMING are associated (or correlated) with ACCSYS TECHPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCSYS TECHPLC EO has no effect on the direction of PENN NATL i.e., PENN NATL and ACCSYS TECHPLC go up and down completely randomly.

Pair Corralation between PENN NATL and ACCSYS TECHPLC

Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 1.47 times more return on investment than ACCSYS TECHPLC. However, PENN NATL is 1.47 times more volatile than ACCSYS TECHPLC EO. It trades about 0.04 of its potential returns per unit of risk. ACCSYS TECHPLC EO is currently generating about -0.05 per unit of risk. If you would invest  1,685  in PENN NATL GAMING on October 25, 2024 and sell it today you would earn a total of  284.00  from holding PENN NATL GAMING or generate 16.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PENN NATL GAMING  vs.  ACCSYS TECHPLC EO

PENN NATL GAMING

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PENN NATL GAMING are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, PENN NATL exhibited solid returns over the last few months and may actually be approaching a breakup point.

ACCSYS TECHPLC EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACCSYS TECHPLC EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with PENN NATL and ACCSYS TECHPLC

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

The idea behind PENN NATL GAMING and ACCSYS TECHPLC EO 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.