Correlation Between Las Vegas and Fair Oaks
Can any of the company-specific risk be diversified away by investing in both Las Vegas and Fair Oaks 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 Fair Oaks 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 Fair Oaks Income, you can compare the effects of market volatilities on Las Vegas and Fair Oaks 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 Fair Oaks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Las Vegas and Fair Oaks.
Diversification Opportunities for Las Vegas and Fair Oaks
Modest diversification
The 3 months correlation between Las and Fair is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Las Vegas Sands and Fair Oaks Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Oaks Income 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 Fair Oaks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Oaks Income has no effect on the direction of Las Vegas i.e., Las Vegas and Fair Oaks go up and down completely randomly.
Pair Corralation between Las Vegas and Fair Oaks
Assuming the 90 days trading horizon Las Vegas is expected to generate 1.5 times less return on investment than Fair Oaks. In addition to that, Las Vegas is 1.9 times more volatile than Fair Oaks Income. It trades about 0.08 of its total potential returns per unit of risk. Fair Oaks Income is currently generating about 0.22 per unit of volatility. If you would invest 55.00 in Fair Oaks Income on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Fair Oaks Income or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Las Vegas Sands vs. Fair Oaks Income
Performance |
| Timeline |
| Las Vegas Sands |
| Fair Oaks Income |
Las Vegas and Fair Oaks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Las Vegas and Fair Oaks
The main advantage of trading using opposite Las Vegas and Fair Oaks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Las Vegas position performs unexpectedly, Fair Oaks 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 Fair Oaks will offset losses from the drop in Fair Oaks' long position.| Las Vegas vs. Ebro Foods | Las Vegas vs. Edita Food Industries | Las Vegas vs. Roebuck Food Group | Las Vegas vs. Associated British Foods |
| Fair Oaks vs. Toyota Motor Corp | Fair Oaks vs. OTP Bank Nyrt | Fair Oaks vs. Las Vegas Sands | Fair Oaks vs. Yum Brands |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |