Correlation Between Las Vegas and Burberry Group
Can any of the company-specific risk be diversified away by investing in both Las Vegas and Burberry Group 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 Las Vegas and Burberry Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Las Vegas Sands and Burberry Group PLC, you can compare the effects of market volatilities on Las Vegas and Burberry Group 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 Las Vegas with a short position of Burberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Las Vegas and Burberry Group.
Diversification Opportunities for Las Vegas and Burberry Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Las and Burberry is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Las Vegas Sands and Burberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burberry Group PLC and Las Vegas 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 Las Vegas Sands are associated (or correlated) with Burberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burberry Group PLC has no effect on the direction of Las Vegas i.e., Las Vegas and Burberry Group go up and down completely randomly.
Pair Corralation between Las Vegas and Burberry Group
Assuming the 90 days trading horizon Las Vegas Sands is expected to under-perform the Burberry Group. But the stock apears to be less risky and, when comparing its historical volatility, Las Vegas Sands is 3.92 times less risky than Burberry Group. The stock trades about -0.15 of its potential returns per unit of risk. The Burberry Group PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 78,680 in Burberry Group PLC on August 28, 2024 and sell it today you would earn a total of 11,400 from holding Burberry Group PLC or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Las Vegas Sands vs. Burberry Group PLC
Performance |
| Timeline |
| Las Vegas Sands |
| Burberry Group PLC |
Las Vegas and Burberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Las Vegas and Burberry Group
The main advantage of trading using opposite Las Vegas and Burberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Las Vegas position performs unexpectedly, Burberry Group 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 Burberry Group will offset losses from the drop in Burberry Group's long position.| Las Vegas vs. Samsung Electronics Co | Las Vegas vs. Samsung Electronics Co | Las Vegas vs. Hyundai Motor | Las Vegas vs. Toyota Motor Corp |
| Burberry Group vs. Toyota Motor Corp | Burberry Group vs. SoftBank Group Corp | Burberry Group vs. OTP Bank Nyrt | Burberry Group vs. Las Vegas Sands |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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