Correlation Between Las Vegas and Golden Entertainment
Can any of the company-specific risk be diversified away by investing in both Las Vegas and Golden Entertainment 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 Golden Entertainment 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 Golden Entertainment, you can compare the effects of market volatilities on Las Vegas and Golden Entertainment 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 Golden Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Las Vegas and Golden Entertainment.
Diversification Opportunities for Las Vegas and Golden Entertainment
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Las and Golden is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Las Vegas Sands and Golden Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Entertainment 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 Golden Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Entertainment has no effect on the direction of Las Vegas i.e., Las Vegas and Golden Entertainment go up and down completely randomly.
Pair Corralation between Las Vegas and Golden Entertainment
Considering the 90-day investment horizon Las Vegas Sands is expected to generate 0.86 times more return on investment than Golden Entertainment. However, Las Vegas Sands is 1.16 times less risky than Golden Entertainment. It trades about 0.07 of its potential returns per unit of risk. Golden Entertainment is currently generating about 0.05 per unit of risk. If you would invest 4,445 in Las Vegas Sands on August 30, 2024 and sell it today you would earn a total of 697.00 from holding Las Vegas Sands or generate 15.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Las Vegas Sands vs. Golden Entertainment
Performance |
| Timeline |
| Las Vegas Sands |
| Golden Entertainment |
Las Vegas and Golden Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Las Vegas and Golden Entertainment
The main advantage of trading using opposite Las Vegas and Golden Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Las Vegas position performs unexpectedly, Golden Entertainment 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 Golden Entertainment will offset losses from the drop in Golden Entertainment's long position.| Las Vegas vs. MGM Resorts International | Las Vegas vs. Caesars Entertainment | Las Vegas vs. Penn National Gaming | Las Vegas vs. Melco Resorts Entertainment |
| Golden Entertainment vs. Chipotle Mexican Grill | Golden Entertainment vs. Yum Brands | Golden Entertainment vs. The Wendys Co | Golden Entertainment vs. McDonalds |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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