Correlation Between PlayAGS and Six Flags

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

By analyzing existing cross correlation between PlayAGS and Six Flags Entertainment, you can compare the effects of market volatilities on PlayAGS and Six Flags 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 PlayAGS with a short position of Six Flags. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayAGS and Six Flags.

Diversification Opportunities for PlayAGS and Six Flags

-0.21

Correlation Coefficient

PlayAGS  Six Flags

Very good diversification

The 3 months correlation between PlayAGS and Six is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS and Six Flags Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Flags Entertainment and PlayAGS 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 PlayAGS are associated (or correlated) with Six Flags. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Flags Entertainment has no effect on the direction of PlayAGS i.e., PlayAGS and Six Flags go up and down completely randomly.

Pair Corralation between PlayAGS and Six Flags

Considering the 90-day investment horizon PlayAGS is expected to generate 1.02 times less return on investment than Six Flags. But when comparing it to its historical volatility, PlayAGS is 1.09 times less risky than Six Flags. It trades about 0.07 of its potential returns per unit of risk. Six Flags Entertainment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,781  in Six Flags Entertainment on October 9, 2024 and sell it today you would earn a total of  1,007  from holding Six Flags Entertainment or generate 26.63% return on investment over 90 days.

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

PlayAGS  vs.  Six Flags Entertainment

PlayAGS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Six Flags Entertainment

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Six Flags Entertainment are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Six Flags displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PlayAGS and Six Flags

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

The idea behind PlayAGS and Six Flags Entertainment 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.