Correlation Between Las Vegas and Grupo Hotelero
Can any of the company-specific risk be diversified away by investing in both Las Vegas and Grupo Hotelero 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 Grupo Hotelero 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 Grupo Hotelero Santa, you can compare the effects of market volatilities on Las Vegas and Grupo Hotelero 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 Grupo Hotelero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Las Vegas and Grupo Hotelero.
Diversification Opportunities for Las Vegas and Grupo Hotelero
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Las and Grupo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Las Vegas Sands and Grupo Hotelero Santa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Hotelero Santa 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 Grupo Hotelero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Hotelero Santa has no effect on the direction of Las Vegas i.e., Las Vegas and Grupo Hotelero go up and down completely randomly.
Pair Corralation between Las Vegas and Grupo Hotelero
Assuming the 90 days trading horizon Las Vegas Sands is expected to generate 0.96 times more return on investment than Grupo Hotelero. However, Las Vegas Sands is 1.05 times less risky than Grupo Hotelero. It trades about 0.08 of its potential returns per unit of risk. Grupo Hotelero Santa is currently generating about 0.01 per unit of risk. If you would invest 78,909 in Las Vegas Sands on September 3, 2024 and sell it today you would earn a total of 32,811 from holding Las Vegas Sands or generate 41.58% 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. Grupo Hotelero Santa
Performance |
| Timeline |
| Las Vegas Sands |
| Grupo Hotelero Santa |
Las Vegas and Grupo Hotelero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Las Vegas and Grupo Hotelero
The main advantage of trading using opposite Las Vegas and Grupo Hotelero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Las Vegas position performs unexpectedly, Grupo Hotelero 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 Grupo Hotelero will offset losses from the drop in Grupo Hotelero's long position.| Las Vegas vs. Southwest Airlines | Las Vegas vs. Hoteles City Express | Las Vegas vs. United Airlines Holdings | Las Vegas vs. DXC Technology |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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