Correlation Between Volkswagen and Las Vegas
Can any of the company-specific risk be diversified away by investing in both Volkswagen 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 Volkswagen and Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and Las Vegas Sands, you can compare the effects of market volatilities on Volkswagen 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 Volkswagen with a short position of Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and Las Vegas.
Diversification Opportunities for Volkswagen and Las Vegas
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Volkswagen and Las is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG 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 Volkswagen 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 Volkswagen AG 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 Volkswagen i.e., Volkswagen and Las Vegas go up and down completely randomly.
Pair Corralation between Volkswagen and Las Vegas
Assuming the 90 days trading horizon Volkswagen AG is expected to generate 1.15 times more return on investment than Las Vegas. However, Volkswagen is 1.15 times more volatile than Las Vegas Sands. It trades about 0.16 of its potential returns per unit of risk. Las Vegas Sands is currently generating about -0.47 per unit of risk. If you would invest 8,940 in Volkswagen AG on October 13, 2024 and sell it today you would earn a total of 400.00 from holding Volkswagen AG or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Volkswagen AG vs. Las Vegas Sands
Performance |
| Timeline |
| Volkswagen AG |
| Las Vegas Sands |
Volkswagen and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and Las Vegas
The main advantage of trading using opposite Volkswagen and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen 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.| Volkswagen vs. Atalaya Mining | Volkswagen vs. Seraphim Space Investment | Volkswagen vs. Thor Mining PLC | Volkswagen vs. Nordic Semiconductor ASA |
| Las Vegas vs. Walmart | Las Vegas vs. BYD Co | Las Vegas vs. Volkswagen AG | Las Vegas vs. Volkswagen AG Non Vtg |
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 CEOs Directory module to screen CEOs from public companies around the world.
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