Correlation Between Penn National and FRACTAL GAMING

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

Diversification Opportunities for Penn National and FRACTAL GAMING

-0.67

Correlation Coefficient

Penn National  FRACTAL GAMING

Excellent diversification

The 3 months correlation between Penn and FRACTAL is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING GROUP 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 FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of Penn National i.e., Penn National and FRACTAL GAMING go up and down completely randomly.

Pair Corralation between Penn National and FRACTAL GAMING

Assuming the 90 days horizon Penn National Gaming is expected to under-perform the FRACTAL GAMING. In addition to that, Penn National is 1.45 times more volatile than FRACTAL GAMING GROUP. It trades about -0.02 of its total potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about 0.28 per unit of volatility. If you would invest  270.00  in FRACTAL GAMING GROUP on October 8, 2024 and sell it today you would earn a total of  30.00  from holding FRACTAL GAMING GROUP or generate 11.11% return on investment over 90 days.

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

Penn National Gaming  vs.  FRACTAL GAMING GROUP

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.

FRACTAL GAMING GROUP

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FRACTAL GAMING GROUP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, FRACTAL GAMING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Penn National and FRACTAL GAMING

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

The idea behind Penn National Gaming and FRACTAL GAMING GROUP 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .