Correlation Between Ametek and Las Vegas

Can any of the company-specific risk be diversified away by investing in both Ametek 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 Ametek and Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ametek Inc and Las Vegas Sands, you can compare the effects of market volatilities on Ametek 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 Ametek with a short position of Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ametek and Las Vegas.

Diversification Opportunities for Ametek and Las Vegas

-0.08

Correlation Coefficient

Ametek  Las Vegas

Good diversification

The 3 months correlation between Ametek and Las is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ametek Inc 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 Ametek 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 Ametek Inc 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 Ametek i.e., Ametek and Las Vegas go up and down completely randomly.

Pair Corralation between Ametek and Las Vegas

Assuming the 90 days trading horizon Ametek Inc is expected to generate 1.08 times more return on investment than Las Vegas. However, Ametek is 1.08 times more volatile than Las Vegas Sands. It trades about 0.07 of its potential returns per unit of risk. Las Vegas Sands is currently generating about -0.04 per unit of risk. If you would invest  16,810  in Ametek Inc on October 10, 2024 and sell it today you would earn a total of  1,144  from holding Ametek Inc or generate 6.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ametek Inc  vs.  Las Vegas Sands

Ametek Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ametek Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ametek may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Las Vegas Sands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Las Vegas Sands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Las Vegas is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ametek and Las Vegas

The main advantage of trading using opposite Ametek and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ametek 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.

The idea behind Ametek Inc and Las Vegas Sands pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..