Correlation Between Tyson Foods and PENN Entertainment,

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

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

Diversification Opportunities for Tyson Foods and PENN Entertainment,

-0.01

Correlation Coefficient

Tyson Foods  PENN Entertainment,

Good diversification

The 3 months correlation between Tyson and PENN is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and PENN Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment, and Tyson Foods 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 Tyson Foods are associated (or correlated) with PENN Entertainment,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN Entertainment, has no effect on the direction of Tyson Foods i.e., Tyson Foods and PENN Entertainment, go up and down completely randomly.

Pair Corralation between Tyson Foods and PENN Entertainment,

Assuming the 90 days trading horizon Tyson Foods is expected to under-perform the PENN Entertainment,. In addition to that, Tyson Foods is 3.18 times more volatile than PENN Entertainment,. It trades about -0.03 of its total potential returns per unit of risk. PENN Entertainment, is currently generating about 0.15 per unit of volatility. If you would invest  1,179  in PENN Entertainment, on December 24, 2024 and sell it today you would earn a total of  46.00  from holding PENN Entertainment, or generate 3.9% return on investment over 90 days.

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

Tyson Foods  vs.  PENN Entertainment,

Tyson Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tyson Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tyson Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PENN Entertainment,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PENN Entertainment, are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, PENN Entertainment, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tyson Foods and PENN Entertainment,

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

The idea behind Tyson Foods and PENN Entertainment, 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.