Correlation Between Banyan Tree and Golden Entertainment

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

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

Diversification Opportunities for Banyan Tree and Golden Entertainment

0.0

Correlation Coefficient

Banyan Tree  Golden Entertainment

Pay attention - limited upside

The 3 months correlation between Banyan and Golden is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Banyan Tree Holdings and Golden Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Entertainment and Banyan Tree 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 Banyan Tree Holdings are associated (or correlated) with Golden Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Entertainment has no effect on the direction of Banyan Tree i.e., Banyan Tree and Golden Entertainment go up and down completely randomly.

Pair Corralation between Banyan Tree and Golden Entertainment

If you would invest  0.08  in Banyan Tree Holdings on December 4, 2024 and sell it today you would earn a total of  0.00  from holding Banyan Tree Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Banyan Tree Holdings  vs.  Golden Entertainment

Banyan Tree Holdings

Risk-Adjusted Performance

Very Weak

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

Golden Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Golden Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Banyan Tree and Golden Entertainment

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

The idea behind Banyan Tree Holdings and Golden 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.