Correlation Between SkyCity Entertainment and Las Vegas
Can any of the company-specific risk be diversified away by investing in both SkyCity Entertainment 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 SkyCity Entertainment and Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SkyCity Entertainment Group and Las Vegas Sands, you can compare the effects of market volatilities on SkyCity Entertainment 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 SkyCity Entertainment with a short position of Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of SkyCity Entertainment and Las Vegas.
Diversification Opportunities for SkyCity Entertainment and Las Vegas
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SkyCity and Las is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SkyCity Entertainment 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 SkyCity Entertainment 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 SkyCity Entertainment 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 SkyCity Entertainment i.e., SkyCity Entertainment and Las Vegas go up and down completely randomly.
Pair Corralation between SkyCity Entertainment and Las Vegas
Assuming the 90 days horizon SkyCity Entertainment Group is expected to under-perform the Las Vegas. In addition to that, SkyCity Entertainment is 1.34 times more volatile than Las Vegas Sands. It trades about -0.07 of its total potential returns per unit of risk. Las Vegas Sands is currently generating about -0.02 per unit of volatility. If you would invest 5,726 in Las Vegas Sands on November 27, 2024 and sell it today you would lose (1,215) from holding Las Vegas Sands or give up 21.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 51.12% |
| Values | Daily Returns |
SkyCity Entertainment Group vs. Las Vegas Sands
Performance |
| Timeline |
| SkyCity Entertainment |
| Las Vegas Sands |
SkyCity Entertainment and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SkyCity Entertainment and Las Vegas
The main advantage of trading using opposite SkyCity Entertainment and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SkyCity Entertainment 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.| SkyCity Entertainment vs. Nagacorp | SkyCity Entertainment vs. Wynn Macau | SkyCity Entertainment vs. MGM China Holdings | SkyCity Entertainment vs. Table Trac |
| Las Vegas vs. MGM Resorts International | Las Vegas vs. Caesars Entertainment | Las Vegas vs. Penn National Gaming | Las Vegas vs. Melco Resorts Entertainment |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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