Correlation Between STMicroelectronics and PENN Entertainment,

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

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

Diversification Opportunities for STMicroelectronics and PENN Entertainment,

-0.47

Correlation Coefficient

STMicroelectronics  PENN Entertainment,

Very good diversification

The 3 months correlation between STMicroelectronics and PENN is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and PENN Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment, and STMicroelectronics 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 STMicroelectronics NV 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 STMicroelectronics i.e., STMicroelectronics and PENN Entertainment, go up and down completely randomly.

Pair Corralation between STMicroelectronics and PENN Entertainment,

Assuming the 90 days trading horizon STMicroelectronics NV is expected to generate 0.75 times more return on investment than PENN Entertainment,. However, STMicroelectronics NV is 1.33 times less risky than PENN Entertainment,. It trades about 0.22 of its potential returns per unit of risk. PENN Entertainment, is currently generating about -0.07 per unit of risk. If you would invest  12,533  in STMicroelectronics NV on April 23, 2025 and sell it today you would earn a total of  4,999  from holding STMicroelectronics NV or generate 39.89% return on investment over 90 days.

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

STMicroelectronics NV  vs.  PENN Entertainment,

STMicroelectronics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in STMicroelectronics NV are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, STMicroelectronics sustained solid returns over the last few months and may actually be approaching a breakup point.

PENN Entertainment,

Risk-Adjusted Performance

Very Weak

Over the last 90 days PENN Entertainment, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with STMicroelectronics and PENN Entertainment,

The main advantage of trading using opposite STMicroelectronics and PENN Entertainment, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics 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 STMicroelectronics NV 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.