Correlation Between GENTING SG and Las Vegas
Can any of the company-specific risk be diversified away by investing in both GENTING SG 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 GENTING SG and Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GENTING SG LTD and Las Vegas Sands, you can compare the effects of market volatilities on GENTING SG 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 GENTING SG with a short position of Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENTING SG and Las Vegas.
Diversification Opportunities for GENTING SG and Las Vegas
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GENTING and Las is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding GENTING SG LTD 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 GENTING SG 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 GENTING SG LTD 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 GENTING SG i.e., GENTING SG and Las Vegas go up and down completely randomly.
Pair Corralation between GENTING SG and Las Vegas
Assuming the 90 days horizon GENTING SG LTD is expected to under-perform the Las Vegas. In addition to that, GENTING SG is 1.14 times more volatile than Las Vegas Sands. It trades about -0.01 of its total potential returns per unit of risk. Las Vegas Sands is currently generating about 0.26 per unit of volatility. If you would invest 3,572 in Las Vegas Sands on September 4, 2024 and sell it today you would earn a total of 1,522 from holding Las Vegas Sands or generate 42.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GENTING SG LTD vs. Las Vegas Sands
Performance |
| Timeline |
| GENTING SG LTD |
| Las Vegas Sands |
GENTING SG and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GENTING SG and Las Vegas
The main advantage of trading using opposite GENTING SG and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENTING SG 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.The idea behind GENTING SG LTD and Las Vegas Sands pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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