Correlation Between Penn National and Sands China
Can any of the company-specific risk be diversified away by investing in both Penn National and Sands China 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 Sands China 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 Sands China, you can compare the effects of market volatilities on Penn National and Sands China 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 Sands China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Sands China.
Diversification Opportunities for Penn National and Sands China
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Penn and Sands is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Sands China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sands China 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 Sands China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sands China has no effect on the direction of Penn National i.e., Penn National and Sands China go up and down completely randomly.
Pair Corralation between Penn National and Sands China
Assuming the 90 days horizon Penn National Gaming is expected to generate 1.16 times more return on investment than Sands China. However, Penn National is 1.16 times more volatile than Sands China. It trades about -0.04 of its potential returns per unit of risk. Sands China is currently generating about -0.12 per unit of risk. If you would invest 1,775 in Penn National Gaming on December 28, 2024 and sell it today you would lose (175.00) from holding Penn National Gaming or give up 9.86% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Penn National Gaming vs. Sands China
Performance |
Timeline |
Penn National Gaming |
Sands China |
Penn National and Sands China Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Penn National and Sands China
The main advantage of trading using opposite Penn National and Sands China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National position performs unexpectedly, Sands China 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 Sands China will offset losses from the drop in Sands China's long position.Penn National vs. Osisko Metals | Penn National vs. United Rentals | Penn National vs. Aluminum of | Penn National vs. WILLIS LEASE FIN |
Sands China vs. Coor Service Management | Sands China vs. Q2M Managementberatung AG | Sands China vs. Charter Communications | Sands China vs. Cairo Communication SpA |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Transaction History View history of all your transactions and understand their impact on performance |