Correlation Between Las Vegas and Penn National
Can any of the company-specific risk be diversified away by investing in both Las Vegas and Penn National 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 Las Vegas and Penn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Las Vegas Sands and Penn National Gaming, you can compare the effects of market volatilities on Las Vegas and Penn National 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 Las Vegas with a short position of Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Las Vegas and Penn National.
Diversification Opportunities for Las Vegas and Penn National
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Las and Penn is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Las Vegas Sands and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National Gaming and Las Vegas 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 Las Vegas Sands are associated (or correlated) with Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of Las Vegas i.e., Las Vegas and Penn National go up and down completely randomly.
Pair Corralation between Las Vegas and Penn National
Assuming the 90 days horizon Las Vegas Sands is expected to generate 0.59 times more return on investment than Penn National. However, Las Vegas Sands is 1.68 times less risky than Penn National. It trades about 0.12 of its potential returns per unit of risk. Penn National Gaming is currently generating about -0.07 per unit of risk. If you would invest 4,759 in Las Vegas Sands on September 22, 2024 and sell it today you would earn a total of 227.00 from holding Las Vegas Sands or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Las Vegas Sands vs. Penn National Gaming
Performance |
| Timeline |
| Las Vegas Sands |
| Penn National Gaming |
Las Vegas and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Las Vegas and Penn National
The main advantage of trading using opposite Las Vegas and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Las Vegas position performs unexpectedly, Penn National 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 Penn National will offset losses from the drop in Penn National's long position.| Las Vegas vs. Superior Plus Corp | Las Vegas vs. SIVERS SEMICONDUCTORS AB | Las Vegas vs. Norsk Hydro ASA | Las Vegas vs. Reliance Steel Aluminum |
| Penn National vs. Las Vegas Sands | Penn National vs. Galaxy Entertainment Group | Penn National vs. Sands China | Penn National vs. MGM Resorts International |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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