Correlation Between Studio City and Galaxy Entertainment
Can any of the company-specific risk be diversified away by investing in both Studio City and Galaxy 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 Studio City and Galaxy Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Studio City International and Galaxy Entertainment Group, you can compare the effects of market volatilities on Studio City and Galaxy 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 Studio City with a short position of Galaxy Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Studio City and Galaxy Entertainment.
Diversification Opportunities for Studio City and Galaxy Entertainment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Studio and Galaxy is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Studio City International and Galaxy Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Entertainment and Studio City 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 Studio City International are associated (or correlated) with Galaxy Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Entertainment has no effect on the direction of Studio City i.e., Studio City and Galaxy Entertainment go up and down completely randomly.
Pair Corralation between Studio City and Galaxy Entertainment
Considering the 90-day investment horizon Studio City International is expected to generate 1.12 times more return on investment than Galaxy Entertainment. However, Studio City is 1.12 times more volatile than Galaxy Entertainment Group. It trades about 0.13 of its potential returns per unit of risk. Galaxy Entertainment Group is currently generating about -0.04 per unit of risk. If you would invest 648.00 in Studio City International on August 25, 2024 and sell it today you would earn a total of 52.00 from holding Studio City International or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Studio City International vs. Galaxy Entertainment Group
Performance |
| Timeline |
| Studio City International |
| Galaxy Entertainment |
Studio City and Galaxy Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Studio City and Galaxy Entertainment
The main advantage of trading using opposite Studio City and Galaxy Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Studio City position performs unexpectedly, Galaxy 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 Galaxy Entertainment will offset losses from the drop in Galaxy Entertainment's long position.| Studio City vs. Golden Entertainment | Studio City vs. Red Rock Resorts | Studio City vs. Century Casinos | Studio City vs. Ballys Corp |
| Galaxy Entertainment vs. SJM Holdings Ltd | Galaxy Entertainment vs. Studio City International | Galaxy Entertainment vs. Monarch Casino Resort | Galaxy Entertainment vs. Playa Hotels Resorts |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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