Correlation Between Caesars Entertainment and Sands China
Can any of the company-specific risk be diversified away by investing in both Caesars Entertainment 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 Caesars Entertainment and Sands China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caesars Entertainment and Sands China, you can compare the effects of market volatilities on Caesars Entertainment 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 Caesars Entertainment with a short position of Sands China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caesars Entertainment and Sands China.
Diversification Opportunities for Caesars Entertainment and Sands China
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Caesars and Sands is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Caesars Entertainment and Sands China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sands China and Caesars Entertainment 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 Caesars Entertainment 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 Caesars Entertainment i.e., Caesars Entertainment and Sands China go up and down completely randomly.
Pair Corralation between Caesars Entertainment and Sands China
Considering the 90-day investment horizon Caesars Entertainment is expected to under-perform the Sands China. But the stock apears to be less risky and, when comparing its historical volatility, Caesars Entertainment is 1.58 times less risky than Sands China. The stock trades about -0.01 of its potential returns per unit of risk. The Sands China is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 268.00 in Sands China on August 29, 2024 and sell it today you would lose (26.00) from holding Sands China or give up 9.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caesars Entertainment vs. Sands China
Performance |
| Timeline |
| Caesars Entertainment |
| Sands China |
Caesars Entertainment and Sands China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caesars Entertainment and Sands China
The main advantage of trading using opposite Caesars Entertainment and Sands China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caesars Entertainment 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.| Caesars Entertainment vs. Las Vegas Sands | Caesars Entertainment vs. Wynn Resorts Limited | Caesars Entertainment vs. Penn National Gaming | Caesars Entertainment vs. Melco Resorts Entertainment |
| Sands China vs. Las Vegas Sands | Sands China vs. MGM Resorts International | Sands China vs. Caesars Entertainment | 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 CEOs Directory module to screen CEOs from public companies around the world.
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