Correlation Between Las Vegas and Lindsell Train
Can any of the company-specific risk be diversified away by investing in both Las Vegas and Lindsell Train 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 Lindsell Train 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 Lindsell Train Investment, you can compare the effects of market volatilities on Las Vegas and Lindsell Train 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 Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of Las Vegas and Lindsell Train.
Diversification Opportunities for Las Vegas and Lindsell Train
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Las and Lindsell is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Las Vegas Sands and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment 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 Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of Las Vegas i.e., Las Vegas and Lindsell Train go up and down completely randomly.
Pair Corralation between Las Vegas and Lindsell Train
Assuming the 90 days trading horizon Las Vegas Sands is expected to generate 1.25 times more return on investment than Lindsell Train. However, Las Vegas is 1.25 times more volatile than Lindsell Train Investment. It trades about 0.02 of its potential returns per unit of risk. Lindsell Train Investment is currently generating about -0.03 per unit of risk. If you would invest 5,173 in Las Vegas Sands on September 3, 2024 and sell it today you would earn a total of 122.00 from holding Las Vegas Sands or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.82% |
| Values | Daily Returns |
Las Vegas Sands vs. Lindsell Train Investment
Performance |
| Timeline |
| Las Vegas Sands |
| Lindsell Train Investment |
Las Vegas and Lindsell Train Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Las Vegas and Lindsell Train
The main advantage of trading using opposite Las Vegas and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Las Vegas position performs unexpectedly, Lindsell Train 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 Lindsell Train will offset losses from the drop in Lindsell Train's long position.| Las Vegas vs. Bellevue Healthcare Trust | Las Vegas vs. Spire Healthcare Group | Las Vegas vs. Veolia Environnement VE | Las Vegas vs. Optima Health plc |
| Lindsell Train vs. SBM Offshore NV | Lindsell Train vs. Air Products Chemicals | Lindsell Train vs. Vienna Insurance Group | Lindsell Train vs. Thor Mining PLC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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