Correlation Between Sands China and Studio City
Can any of the company-specific risk be diversified away by investing in both Sands China and Studio City 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 Studio City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sands China Ltd and Studio City International, you can compare the effects of market volatilities on Sands China and Studio City 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 Studio City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sands China and Studio City.
Diversification Opportunities for Sands China and Studio City
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sands and Studio is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sands China Ltd and Studio City International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Studio City International 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 Ltd are associated (or correlated) with Studio City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Studio City International has no effect on the direction of Sands China i.e., Sands China and Studio City go up and down completely randomly.
Pair Corralation between Sands China and Studio City
Assuming the 90 days horizon Sands China Ltd is expected to under-perform the Studio City. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sands China Ltd is 2.03 times less risky than Studio City. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Studio City International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 329.00 in Studio City International on August 25, 2024 and sell it today you would earn a total of 371.00 from holding Studio City International or generate 112.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sands China Ltd vs. Studio City International
Performance |
| Timeline |
| Sands China |
| Studio City International |
Sands China and Studio City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sands China and Studio City
The main advantage of trading using opposite Sands China and Studio City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sands China position performs unexpectedly, Studio City 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 Studio City will offset losses from the drop in Studio City's long position.| Sands China vs. SJM Holdings Ltd | Sands China vs. Studio City International | Sands China vs. Monarch Casino Resort | Sands China vs. Playa Hotels Resorts |
| Studio City vs. Golden Entertainment | Studio City vs. Red Rock Resorts | Studio City vs. Century Casinos | Studio City vs. Ballys Corp |
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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