Correlation Between Flagship Investments and Skycity Entertainment

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

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

Diversification Opportunities for Flagship Investments and Skycity Entertainment

0.17

Correlation Coefficient

Flagship Investments  Skycity Entertainment

Average diversification

The 3 months correlation between Flagship and Skycity is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments and Skycity Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skycity Entertainment and Flagship Investments 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 Flagship Investments are associated (or correlated) with Skycity Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skycity Entertainment has no effect on the direction of Flagship Investments i.e., Flagship Investments and Skycity Entertainment go up and down completely randomly.

Pair Corralation between Flagship Investments and Skycity Entertainment

Assuming the 90 days trading horizon Flagship Investments is expected to generate 1.14 times less return on investment than Skycity Entertainment. But when comparing it to its historical volatility, Flagship Investments is 1.8 times less risky than Skycity Entertainment. It trades about 0.08 of its potential returns per unit of risk. Skycity Entertainment Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  127.00  in Skycity Entertainment Group on September 20, 2024 and sell it today you would earn a total of  8.00  from holding Skycity Entertainment Group or generate 6.3% return on investment over 90 days.

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

Flagship Investments  vs.  Skycity Entertainment Group

Flagship Investments

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Flagship Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Flagship Investments may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Skycity Entertainment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Skycity Entertainment Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Skycity Entertainment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Flagship Investments and Skycity Entertainment

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

The idea behind Flagship Investments and Skycity Entertainment Group 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.