Correlation Between Roebuck Food and Las Vegas
Can any of the company-specific risk be diversified away by investing in both Roebuck Food 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 Roebuck Food and Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roebuck Food Group and Las Vegas Sands, you can compare the effects of market volatilities on Roebuck Food 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 Roebuck Food with a short position of Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and Las Vegas.
Diversification Opportunities for Roebuck Food and Las Vegas
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Roebuck and Las is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food Group 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 Roebuck Food 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 Roebuck Food Group 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 Roebuck Food i.e., Roebuck Food and Las Vegas go up and down completely randomly.
Pair Corralation between Roebuck Food and Las Vegas
Assuming the 90 days trading horizon Roebuck Food Group is expected to generate 1.12 times more return on investment than Las Vegas. However, Roebuck Food is 1.12 times more volatile than Las Vegas Sands. It trades about 0.04 of its potential returns per unit of risk. Las Vegas Sands is currently generating about 0.01 per unit of risk. If you would invest 1,300 in Roebuck Food Group on September 3, 2024 and sell it today you would earn a total of 380.00 from holding Roebuck Food Group or generate 29.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.96% |
| Values | Daily Returns |
Roebuck Food Group vs. Las Vegas Sands
Performance |
| Timeline |
| Roebuck Food Group |
| Las Vegas Sands |
Roebuck Food and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roebuck Food and Las Vegas
The main advantage of trading using opposite Roebuck Food and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food 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.| Roebuck Food vs. Charter Communications Cl | Roebuck Food vs. Norwegian Air Shuttle | Roebuck Food vs. Hochschild Mining plc | Roebuck Food vs. Sealed Air Corp |
| Las Vegas vs. Bellevue Healthcare Trust | Las Vegas vs. Spire Healthcare Group | Las Vegas vs. Veolia Environnement VE | Las Vegas vs. Optima Health plc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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