Correlation Between Sands China and ENTAIN PLC
Can any of the company-specific risk be diversified away by investing in both Sands China and ENTAIN PLC 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 Sands China and ENTAIN PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sands China and ENTAIN PLC UNSPADR1, you can compare the effects of market volatilities on Sands China and ENTAIN PLC 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 Sands China with a short position of ENTAIN PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sands China and ENTAIN PLC.
Diversification Opportunities for Sands China and ENTAIN PLC
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sands and ENTAIN is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sands China and ENTAIN PLC UNSPADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENTAIN PLC UNSPADR1 and Sands China 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 Sands China are associated (or correlated) with ENTAIN PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENTAIN PLC UNSPADR1 has no effect on the direction of Sands China i.e., Sands China and ENTAIN PLC go up and down completely randomly.
Pair Corralation between Sands China and ENTAIN PLC
Assuming the 90 days trading horizon Sands China is expected to under-perform the ENTAIN PLC. But the stock apears to be less risky and, when comparing its historical volatility, Sands China is 1.74 times less risky than ENTAIN PLC. The stock trades about -0.54 of its potential returns per unit of risk. The ENTAIN PLC UNSPADR1 is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest 855.00 in ENTAIN PLC UNSPADR1 on October 20, 2024 and sell it today you would lose (110.00) from holding ENTAIN PLC UNSPADR1 or give up 12.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sands China vs. ENTAIN PLC UNSPADR1
Performance |
| Timeline |
| Sands China |
| ENTAIN PLC UNSPADR1 |
Sands China and ENTAIN PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sands China and ENTAIN PLC
The main advantage of trading using opposite Sands China and ENTAIN PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sands China position performs unexpectedly, ENTAIN PLC 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 ENTAIN PLC will offset losses from the drop in ENTAIN PLC's long position.| Sands China vs. Las Vegas Sands | Sands China vs. Galaxy Entertainment Group | Sands China vs. MGM Resorts International | Sands China vs. Wynn Resorts Limited |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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