Correlation Between Entain Plc and Sands China
Can any of the company-specific risk be diversified away by investing in both Entain Plc and Sands China 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 Entain Plc and Sands China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entain Plc and Sands China, you can compare the effects of market volatilities on Entain Plc and Sands China 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 Entain Plc with a short position of Sands China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entain Plc and Sands China.
Diversification Opportunities for Entain Plc and Sands China
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Entain and Sands is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Entain Plc and Sands China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sands China and Entain Plc 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 Entain Plc are associated (or correlated) with Sands China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sands China has no effect on the direction of Entain Plc i.e., Entain Plc and Sands China go up and down completely randomly.
Pair Corralation between Entain Plc and Sands China
Assuming the 90 days horizon Entain Plc is expected to generate 1.8 times more return on investment than Sands China. However, Entain Plc is 1.8 times more volatile than Sands China. It trades about -0.13 of its potential returns per unit of risk. Sands China is currently generating about -0.54 per unit of risk. If you would invest 859.00 in Entain Plc on October 20, 2024 and sell it today you would lose (69.00) from holding Entain Plc or give up 8.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Entain Plc vs. Sands China
Performance |
| Timeline |
| Entain Plc |
| Sands China |
Entain Plc and Sands China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entain Plc and Sands China
The main advantage of trading using opposite Entain Plc and Sands China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entain Plc position performs unexpectedly, Sands China 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 Sands China will offset losses from the drop in Sands China's long position.| Entain Plc vs. Las Vegas Sands | Entain Plc vs. Galaxy Entertainment Group | Entain Plc vs. Sands China | Entain Plc vs. MGM Resorts International |
| Sands China vs. Las Vegas Sands | Sands China vs. Galaxy Entertainment Group | Sands China vs. MGM Resorts International | Sands China 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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