Correlation Between International Game and Las Vegas
Can any of the company-specific risk be diversified away by investing in both International Game 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 International Game and Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Game Technology and Las Vegas Sands, you can compare the effects of market volatilities on International Game 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 International Game with a short position of Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Las Vegas.
Diversification Opportunities for International Game and Las Vegas
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Las is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology 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 International Game 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 International Game Technology 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 International Game i.e., International Game and Las Vegas go up and down completely randomly.
Pair Corralation between International Game and Las Vegas
Considering the 90-day investment horizon International Game Technology is expected to under-perform the Las Vegas. In addition to that, International Game is 1.22 times more volatile than Las Vegas Sands. It trades about -0.05 of its total potential returns per unit of risk. Las Vegas Sands is currently generating about 0.03 per unit of volatility. If you would invest 4,599 in Las Vegas Sands on August 27, 2024 and sell it today you would earn a total of 409.00 from holding Las Vegas Sands or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. Las Vegas Sands
Performance |
| Timeline |
| International Game |
| Las Vegas Sands |
International Game and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Las Vegas
The main advantage of trading using opposite International Game and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game 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.| International Game vs. Accel Entertainment | International Game vs. PlayAGS | International Game vs. Everi Holdings | International Game vs. Light Wonder |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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