Correlation Between Sands China and Genting Singapore
Can any of the company-specific risk be diversified away by investing in both Sands China and Genting Singapore 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 Sands China and Genting Singapore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sands China and Genting Singapore PLC, you can compare the effects of market volatilities on Sands China and Genting Singapore 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 Sands China with a short position of Genting Singapore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sands China and Genting Singapore.
Diversification Opportunities for Sands China and Genting Singapore
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sands and Genting is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sands China and Genting Singapore PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genting Singapore PLC and Sands China 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 Sands China are associated (or correlated) with Genting Singapore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genting Singapore PLC has no effect on the direction of Sands China i.e., Sands China and Genting Singapore go up and down completely randomly.
Pair Corralation between Sands China and Genting Singapore
Assuming the 90 days horizon Sands China is expected to generate 1.44 times more return on investment than Genting Singapore. However, Sands China is 1.44 times more volatile than Genting Singapore PLC. It trades about 0.0 of its potential returns per unit of risk. Genting Singapore PLC is currently generating about -0.06 per unit of risk. If you would invest 289.00 in Sands China on September 12, 2024 and sell it today you would lose (9.00) from holding Sands China or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sands China vs. Genting Singapore PLC
Performance |
| Timeline |
| Sands China |
| Genting Singapore PLC |
Sands China and Genting Singapore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sands China and Genting Singapore
The main advantage of trading using opposite Sands China and Genting Singapore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sands China position performs unexpectedly, Genting Singapore 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 Genting Singapore will offset losses from the drop in Genting Singapore's long position.| Sands China vs. Las Vegas Sands | Sands China vs. MGM Resorts International | Sands China vs. Caesars Entertainment | Sands China vs. Wynn Resorts Limited |
| Genting Singapore vs. Omni Health | Genting Singapore vs. Kontoor Brands | Genting Singapore vs. Lipocine | Genting Singapore vs. Nike Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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