Correlation Between Virtus Investment and PENN NATL
Can any of the company-specific risk be diversified away by investing in both Virtus Investment and PENN NATL 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 Virtus Investment and PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Investment Partners and PENN NATL GAMING, you can compare the effects of market volatilities on Virtus Investment and PENN NATL 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 Virtus Investment with a short position of PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Investment and PENN NATL.
Diversification Opportunities for Virtus Investment and PENN NATL
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Virtus and PENN is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING and Virtus Investment 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 Virtus Investment Partners are associated (or correlated) with PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of Virtus Investment i.e., Virtus Investment and PENN NATL go up and down completely randomly.
Pair Corralation between Virtus Investment and PENN NATL
Assuming the 90 days horizon Virtus Investment Partners is expected to under-perform the PENN NATL. But the stock apears to be less risky and, when comparing its historical volatility, Virtus Investment Partners is 1.34 times less risky than PENN NATL. The stock trades about -0.18 of its potential returns per unit of risk. The PENN NATL GAMING is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,773 in PENN NATL GAMING on December 28, 2024 and sell it today you would lose (164.00) from holding PENN NATL GAMING or give up 9.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Virtus Investment Partners vs. PENN NATL GAMING
Performance |
Timeline |
Virtus Investment |
PENN NATL GAMING |
Virtus Investment and PENN NATL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Virtus Investment and PENN NATL
The main advantage of trading using opposite Virtus Investment and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Investment position performs unexpectedly, PENN NATL 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 NATL will offset losses from the drop in PENN NATL's long position.Virtus Investment vs. Cardinal Health | Virtus Investment vs. Urban Outfitters | Virtus Investment vs. HEALTHSTREAM | Virtus Investment vs. NORDHEALTH AS NK |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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