Correlation Between Caesars Entertainment and Hill Street

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

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

Diversification Opportunities for Caesars Entertainment and Hill Street

-0.64

Correlation Coefficient

Caesars Entertainment  Hill Street

Excellent diversification

The 3 months correlation between Caesars and Hill is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Caesars Entertainment and Hill Street Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hill Street Beverage and Caesars Entertainment 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 Caesars Entertainment are associated (or correlated) with Hill Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hill Street Beverage has no effect on the direction of Caesars Entertainment i.e., Caesars Entertainment and Hill Street go up and down completely randomly.

Pair Corralation between Caesars Entertainment and Hill Street

Considering the 90-day investment horizon Caesars Entertainment is expected to generate 0.42 times more return on investment than Hill Street. However, Caesars Entertainment is 2.41 times less risky than Hill Street. It trades about 0.03 of its potential returns per unit of risk. Hill Street Beverage is currently generating about -0.04 per unit of risk. If you would invest  3,709  in Caesars Entertainment on September 5, 2024 and sell it today you would earn a total of  109.00  from holding Caesars Entertainment or generate 2.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Caesars Entertainment  vs.  Hill Street Beverage

Caesars Entertainment

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caesars Entertainment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Caesars Entertainment is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Hill Street Beverage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hill Street Beverage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Caesars Entertainment and Hill Street

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

The idea behind Caesars Entertainment and Hill Street Beverage 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.