Correlation Between GENTING SG and Entain Plc

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

By analyzing existing cross correlation between GENTING SG LTD and Entain Plc, you can compare the effects of market volatilities on GENTING SG and Entain Plc 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 GENTING SG with a short position of Entain Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GENTING SG and Entain Plc.

Diversification Opportunities for GENTING SG and Entain Plc

-0.35

Correlation Coefficient

GENTING SG  Entain Plc

Very good diversification

The 3 months correlation between GENTING and Entain is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding GENTING SG LTD and Entain Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entain Plc and GENTING SG 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 GENTING SG LTD are associated (or correlated) with Entain Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entain Plc has no effect on the direction of GENTING SG i.e., GENTING SG and Entain Plc go up and down completely randomly.

Pair Corralation between GENTING SG and Entain Plc

Assuming the 90 days horizon GENTING SG LTD is expected to generate 1.19 times more return on investment than Entain Plc. However, GENTING SG is 1.19 times more volatile than Entain Plc. It trades about -0.03 of its potential returns per unit of risk. Entain Plc is currently generating about -0.08 per unit of risk. If you would invest  54.00  in GENTING SG LTD on September 23, 2024 and sell it today you would lose (2.00) from holding GENTING SG LTD or give up 3.7% of portfolio value over 90 days.

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

GENTING SG LTD  vs.  Entain Plc

GENTING SG LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GENTING SG LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GENTING SG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Entain Plc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Entain Plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Entain Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GENTING SG and Entain Plc

The main advantage of trading using opposite GENTING SG and Entain Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GENTING SG position performs unexpectedly, Entain Plc 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 Entain Plc will offset losses from the drop in Entain Plc's long position.

The idea behind GENTING SG LTD and Entain Plc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.