Correlation Between Penn National and Aya Gold

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

Diversification Opportunities for Penn National and Aya Gold

-0.61

Correlation Coefficient

Penn National  Aya Gold

Excellent diversification

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

Pair Corralation between Penn National and Aya Gold

Assuming the 90 days horizon Penn National Gaming is expected to generate 1.33 times more return on investment than Aya Gold. However, Penn National is 1.33 times more volatile than Aya Gold Silver. It trades about -0.06 of its potential returns per unit of risk. Aya Gold Silver is currently generating about -0.49 per unit of risk. If you would invest  1,900  in Penn National Gaming on October 10, 2024 and sell it today you would lose (89.00) from holding Penn National Gaming or give up 4.68% of portfolio value over 90 days.

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

Penn National Gaming  vs.  Aya Gold Silver

Penn National Gaming

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Penn National Gaming are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Penn National reported solid returns over the last few months and may actually be approaching a breakup point.

Aya Gold Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aya Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Penn National and Aya Gold

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

The idea behind Penn National Gaming and Aya Gold Silver 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.