Correlation Between PlayAGS and Las Vegas
Can any of the company-specific risk be diversified away by investing in both PlayAGS 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 PlayAGS and Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PlayAGS and Las Vegas Sands, you can compare the effects of market volatilities on PlayAGS 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 PlayAGS with a short position of Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayAGS and Las Vegas.
Diversification Opportunities for PlayAGS and Las Vegas
Very poor diversification
The 3 months correlation between PlayAGS and Las is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS 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 PlayAGS 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 PlayAGS 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 PlayAGS i.e., PlayAGS and Las Vegas go up and down completely randomly.
Pair Corralation between PlayAGS and Las Vegas
Considering the 90-day investment horizon PlayAGS is expected to generate 1.36 times more return on investment than Las Vegas. However, PlayAGS is 1.36 times more volatile than Las Vegas Sands. It trades about 0.08 of its potential returns per unit of risk. Las Vegas Sands is currently generating about 0.03 per unit of risk. If you would invest 787.00 in PlayAGS on August 27, 2024 and sell it today you would earn a total of 379.00 from holding PlayAGS or generate 48.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PlayAGS vs. Las Vegas Sands
Performance |
| Timeline |
| PlayAGS |
| Las Vegas Sands |
PlayAGS and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PlayAGS and Las Vegas
The main advantage of trading using opposite PlayAGS and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayAGS 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.| PlayAGS vs. Light Wonder | PlayAGS vs. Everi Holdings | PlayAGS vs. Inspired Entertainment | PlayAGS vs. International Game Technology |
| Las Vegas vs. MGM Resorts International | Las Vegas vs. Caesars Entertainment | Las Vegas vs. Penn National Gaming | Las Vegas vs. Melco Resorts Entertainment |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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