Correlation Between Gambling and Canterbury Park

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

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

Diversification Opportunities for Gambling and Canterbury Park

0.18

Correlation Coefficient

Gambling  Canterbury Park

Average diversification

The 3 months correlation between Gambling and Canterbury is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Gambling Group and Canterbury Park Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canterbury Park Holding and Gambling 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 Gambling Group are associated (or correlated) with Canterbury Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canterbury Park Holding has no effect on the direction of Gambling i.e., Gambling and Canterbury Park go up and down completely randomly.

Pair Corralation between Gambling and Canterbury Park

Given the investment horizon of 90 days Gambling Group is expected to generate 1.42 times more return on investment than Canterbury Park. However, Gambling is 1.42 times more volatile than Canterbury Park Holding. It trades about 0.14 of its potential returns per unit of risk. Canterbury Park Holding is currently generating about 0.0 per unit of risk. If you would invest  1,019  in Gambling Group on August 30, 2024 and sell it today you would earn a total of  273.00  from holding Gambling Group or generate 26.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.19%
Values	Daily Returns

Gambling Group  vs.  Canterbury Park Holding

Gambling Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gambling Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating primary indicators, Gambling sustained solid returns over the last few months and may actually be approaching a breakup point.

Canterbury Park Holding

Risk-Adjusted Performance

0 of 100

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 rather sound technical indicators, Canterbury Park is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Gambling and Canterbury Park

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

The idea behind Gambling Group and Canterbury Park Holding 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.