Correlation Between PENN NATL and MeVis Medical

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

Diversification Opportunities for PENN NATL and MeVis Medical

PENNMeVisDiversified AwayPENNMeVisDiversified Away100%
0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between PENN and MeVis is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and MeVis Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeVis Medical Solutions 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 MeVis Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeVis Medical Solutions has no effect on the direction of PENN NATL i.e., PENN NATL and MeVis Medical go up and down completely randomly.

Pair Corralation between PENN NATL and MeVis Medical

Assuming the 90 days trading horizon PENN NATL GAMING is expected to generate 3.05 times more return on investment than MeVis Medical. However, PENN NATL is 3.05 times more volatile than MeVis Medical Solutions. It trades about 0.09 of its potential returns per unit of risk. MeVis Medical Solutions is currently generating about 0.07 per unit of risk. If you would invest  1,726  in PENN NATL GAMING on October 20, 2024 and sell it today you would earn a total of  250.00  from holding PENN NATL GAMING or generate 14.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

PENN NATL GAMING  vs.  MeVis Medical Solutions

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 510152025
JavaScript chart by amCharts 3.21.15PN1 M3V
       Timeline  
PENN NATL GAMING 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in PENN NATL GAMING are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, PENN NATL exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1717.51818.51919.52020.521
MeVis Medical Solutions 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in MeVis Medical Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MeVis Medical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan23.623.82424.224.424.624.825

PENN NATL and MeVis Medical Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.76-6.56-4.36-2.160.03862.284.596.919.22 0.10.20.30.4
JavaScript chart by amCharts 3.21.15PN1 M3V
       Returns  

Pair Trading with PENN NATL and MeVis Medical

The main advantage of trading using opposite PENN NATL and MeVis Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL position performs unexpectedly, MeVis Medical 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 MeVis Medical will offset losses from the drop in MeVis Medical's long position.
The idea behind PENN NATL GAMING and MeVis Medical Solutions 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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