Correlation Between British American and Las Vegas
Can any of the company-specific risk be diversified away by investing in both British American and Las Vegas 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 British American and Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and Las Vegas Sands, you can compare the effects of market volatilities on British American and Las Vegas 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 British American with a short position of Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of British American and Las Vegas.
Diversification Opportunities for British American and Las Vegas
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between British and Las is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands and British American 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 British American Tobacco are associated (or correlated) with Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of British American i.e., British American and Las Vegas go up and down completely randomly.
Pair Corralation between British American and Las Vegas
Assuming the 90 days trading horizon British American Tobacco is expected to generate 0.97 times more return on investment than Las Vegas. However, British American Tobacco is 1.04 times less risky than Las Vegas. It trades about 0.05 of its potential returns per unit of risk. Las Vegas Sands is currently generating about 0.0 per unit of risk. If you would invest 2,818 in British American Tobacco on August 31, 2024 and sell it today you would earn a total of 979.00 from holding British American Tobacco or generate 34.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
British American Tobacco vs. Las Vegas Sands
Performance |
| Timeline |
| British American Tobacco |
| Las Vegas Sands |
British American and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British American and Las Vegas
The main advantage of trading using opposite British American and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British American position performs unexpectedly, Las Vegas 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 Las Vegas will offset losses from the drop in Las Vegas' long position.| British American vs. Neometals | British American vs. Coor Service Management | British American vs. Aeorema Communications Plc | British American vs. JLEN Environmental Assets |
| Las Vegas vs. Erste Group Bank | Las Vegas vs. British American Tobacco | Las Vegas vs. X FAB Silicon Foundries | Las Vegas vs. Sparebank 1 SR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |