Correlation Between Canterbury Park and Accel Entertainment

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

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

Diversification Opportunities for Canterbury Park and Accel Entertainment

0.46

Correlation Coefficient

Canterbury Park  Accel Entertainment

Very weak diversification

The 3 months correlation between Canterbury and Accel is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Canterbury Park Holding and Accel Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accel Entertainment and Canterbury Park 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 Canterbury Park Holding are associated (or correlated) with Accel Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accel Entertainment has no effect on the direction of Canterbury Park i.e., Canterbury Park and Accel Entertainment go up and down completely randomly.

Pair Corralation between Canterbury Park and Accel Entertainment

Given the investment horizon of 90 days Canterbury Park Holding is expected to under-perform the Accel Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Canterbury Park Holding is 1.07 times less risky than Accel Entertainment. The stock trades about -0.11 of its potential returns per unit of risk. The Accel Entertainment is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,057  in Accel Entertainment on December 30, 2024 and sell it today you would lose (60.00) from holding Accel Entertainment or give up 5.68% of portfolio value over 90 days.

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

Canterbury Park Holding  vs.  Accel Entertainment

Canterbury Park Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canterbury Park Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Accel Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Accel Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Accel Entertainment is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Canterbury Park and Accel Entertainment

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

The idea behind Canterbury Park Holding and Accel 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.