Correlation Between Sands China and Galaxy Entertainment
Can any of the company-specific risk be diversified away by investing in both Sands China and Galaxy Entertainment 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 Galaxy Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sands China and Galaxy Entertainment Group, you can compare the effects of market volatilities on Sands China and Galaxy Entertainment 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 Galaxy Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sands China and Galaxy Entertainment.
Diversification Opportunities for Sands China and Galaxy Entertainment
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sands and Galaxy is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sands China and Galaxy Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Entertainment 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 Galaxy Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Entertainment has no effect on the direction of Sands China i.e., Sands China and Galaxy Entertainment go up and down completely randomly.
Pair Corralation between Sands China and Galaxy Entertainment
Assuming the 90 days trading horizon Sands China is expected to under-perform the Galaxy Entertainment. In addition to that, Sands China is 1.17 times more volatile than Galaxy Entertainment Group. It trades about -0.54 of its total potential returns per unit of risk. Galaxy Entertainment Group is currently generating about -0.27 per unit of volatility. If you would invest 418.00 in Galaxy Entertainment Group on October 20, 2024 and sell it today you would lose (30.00) from holding Galaxy Entertainment Group or give up 7.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Sands China vs. Galaxy Entertainment Group
Performance |
| Timeline |
| Sands China |
| Galaxy Entertainment |
Sands China and Galaxy Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sands China and Galaxy Entertainment
The main advantage of trading using opposite Sands China and Galaxy Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sands China position performs unexpectedly, Galaxy Entertainment 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 Galaxy Entertainment will offset losses from the drop in Galaxy Entertainment'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 |
| Galaxy Entertainment vs. Las Vegas Sands | Galaxy Entertainment vs. Sands China | Galaxy Entertainment vs. MGM Resorts International | Galaxy Entertainment vs. Wynn Resorts Limited |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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