Correlation Between ENTAIN PLC and Galaxy Entertainment

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

By analyzing existing cross correlation between ENTAIN PLC UNSPADR1 and Galaxy Entertainment Group, you can compare the effects of market volatilities on ENTAIN PLC and Galaxy Entertainment 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 Galaxy Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENTAIN PLC and Galaxy Entertainment.

Diversification Opportunities for ENTAIN PLC and Galaxy Entertainment

0.34

Correlation Coefficient

ENTAIN PLC  Galaxy Entertainment

Weak diversification

The 3 months correlation between ENTAIN and Galaxy is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ENTAIN PLC UNSPADR1 and Galaxy Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Entertainment 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 UNSPADR1 are associated (or correlated) with Galaxy Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Entertainment has no effect on the direction of ENTAIN PLC i.e., ENTAIN PLC and Galaxy Entertainment go up and down completely randomly.

Pair Corralation between ENTAIN PLC and Galaxy Entertainment

Assuming the 90 days trading horizon ENTAIN PLC is expected to generate 1.17 times less return on investment than Galaxy Entertainment. But when comparing it to its historical volatility, ENTAIN PLC UNSPADR1 is 1.47 times less risky than Galaxy Entertainment. It trades about 0.05 of its potential returns per unit of risk. Galaxy Entertainment Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  362.00  in Galaxy Entertainment Group on October 2, 2024 and sell it today you would earn a total of  40.00  from holding Galaxy Entertainment Group or generate 11.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ENTAIN PLC UNSPADR1  vs.  Galaxy Entertainment Group

ENTAIN PLC UNSPADR1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENTAIN PLC UNSPADR1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Galaxy Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galaxy Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ENTAIN PLC and Galaxy Entertainment

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

The idea behind ENTAIN PLC UNSPADR1 and Galaxy Entertainment Group 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.