Correlation Between VITEC SOFTWARE and Las Vegas

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

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

Diversification Opportunities for VITEC SOFTWARE and Las Vegas

0.38

Correlation Coefficient

VITEC SOFTWARE  Las Vegas

Weak diversification

The 3 months correlation between VITEC and Las is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding VITEC SOFTWARE 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 VITEC SOFTWARE 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 VITEC SOFTWARE 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 VITEC SOFTWARE i.e., VITEC SOFTWARE and Las Vegas go up and down completely randomly.

Pair Corralation between VITEC SOFTWARE and Las Vegas

Assuming the 90 days horizon VITEC SOFTWARE GROUP is expected to generate 1.21 times more return on investment than Las Vegas. However, VITEC SOFTWARE is 1.21 times more volatile than Las Vegas Sands. It trades about 0.05 of its potential returns per unit of risk. Las Vegas Sands is currently generating about 0.01 per unit of risk. If you would invest  3,217  in VITEC SOFTWARE GROUP on October 4, 2024 and sell it today you would earn a total of  1,543  from holding VITEC SOFTWARE GROUP or generate 47.96% return on investment over 90 days.

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

VITEC SOFTWARE GROUP  vs.  Las Vegas Sands

VITEC SOFTWARE GROUP

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VITEC SOFTWARE GROUP are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, VITEC SOFTWARE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Las Vegas Sands

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Las Vegas Sands are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Las Vegas is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VITEC SOFTWARE and Las Vegas

The main advantage of trading using opposite VITEC SOFTWARE and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VITEC SOFTWARE 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 VITEC SOFTWARE GROUP 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.