Correlation Between Caesars Entertainment and Las Vegas

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

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

Diversification Opportunities for Caesars Entertainment and Las Vegas

0.06

Correlation Coefficient

Caesars Entertainment  Las Vegas

Significant diversification

The 3 months correlation between Caesars and Las is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Caesars Entertainment 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 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 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 Caesars Entertainment i.e., Caesars Entertainment and Las Vegas go up and down completely randomly.

Pair Corralation between Caesars Entertainment and Las Vegas

Considering the 90-day investment horizon Caesars Entertainment is expected to generate 1.13 times more return on investment than Las Vegas. However, Caesars Entertainment is 1.13 times more volatile than Las Vegas Sands. It trades about -0.11 of its potential returns per unit of risk. Las Vegas Sands is currently generating about -0.16 per unit of risk. If you would invest  3,309  in Caesars Entertainment on December 27, 2024 and sell it today you would lose (604.50) from holding Caesars Entertainment or give up 18.27% of portfolio value over 90 days.

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

Caesars Entertainment  vs.  Las Vegas Sands

Caesars Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caesars Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Las Vegas Sands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Las Vegas Sands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Caesars Entertainment and Las Vegas

The main advantage of trading using opposite Caesars Entertainment and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caesars Entertainment 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 Caesars Entertainment 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.