Correlation Between PENN Entertainment and INTER CARS

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

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

Diversification Opportunities for PENN Entertainment and INTER CARS

0.46

Correlation Coefficient

PENN Entertainment  INTER CARS

Very weak diversification

The 3 months correlation between PENN and INTER is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA and PENN Entertainment 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 Entertainment are associated (or correlated) with INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of PENN Entertainment i.e., PENN Entertainment and INTER CARS go up and down completely randomly.

Pair Corralation between PENN Entertainment and INTER CARS

Assuming the 90 days trading horizon PENN Entertainment is expected to generate 1.34 times more return on investment than INTER CARS. However, PENN Entertainment is 1.34 times more volatile than INTER CARS SA. It trades about 0.11 of its potential returns per unit of risk. INTER CARS SA is currently generating about 0.06 per unit of risk. If you would invest  1,304  in PENN Entertainment on April 24, 2025 and sell it today you would earn a total of  242.00  from holding PENN Entertainment or generate 18.56% return on investment over 90 days.

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

PENN Entertainment  vs.  INTER CARS SA

PENN Entertainment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PENN Entertainment are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, PENN Entertainment unveiled solid returns over the last few months and may actually be approaching a breakup point.

INTER CARS SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTER CARS SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, INTER CARS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with PENN Entertainment and INTER CARS

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

The idea behind PENN Entertainment and INTER CARS SA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.