Correlation Between Entain Plc and TSOGO SUN

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

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

Diversification Opportunities for Entain Plc and TSOGO SUN

-0.71

Correlation Coefficient

Entain Plc  TSOGO SUN

Pay attention - limited upside

The 3 months correlation between Entain and TSOGO is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Entain Plc and TSOGO SUN GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSOGO SUN GAMING and Entain Plc 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 Entain Plc are associated (or correlated) with TSOGO SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSOGO SUN GAMING has no effect on the direction of Entain Plc i.e., Entain Plc and TSOGO SUN go up and down completely randomly.

Pair Corralation between Entain Plc and TSOGO SUN

Assuming the 90 days horizon Entain Plc is expected to generate 1.64 times more return on investment than TSOGO SUN. However, Entain Plc is 1.64 times more volatile than TSOGO SUN GAMING. It trades about -0.05 of its potential returns per unit of risk. TSOGO SUN GAMING is currently generating about -0.24 per unit of risk. If you would invest  830.00  in Entain Plc on October 24, 2024 and sell it today you would lose (28.00) from holding Entain Plc or give up 3.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

Entain Plc  vs.  TSOGO SUN GAMING

Entain Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entain Plc has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

TSOGO SUN GAMING

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TSOGO SUN GAMING are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TSOGO SUN reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Entain Plc and TSOGO SUN

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

The idea behind Entain Plc and TSOGO SUN GAMING 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.