Correlation Between Gan and Entain Plc

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

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

Diversification Opportunities for Gan and Entain Plc

-0.4

Correlation Coefficient

Gan  Entain Plc

Very good diversification

The 3 months correlation between Gan and Entain is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Gan and Entain Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entain Plc and Gan 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 Gan are associated (or correlated) with Entain Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entain Plc has no effect on the direction of Gan i.e., Gan and Entain Plc go up and down completely randomly.

Pair Corralation between Gan and Entain Plc

Considering the 90-day investment horizon Gan is expected to under-perform the Entain Plc. But the stock apears to be less risky and, when comparing its historical volatility, Gan is 3.37 times less risky than Entain Plc. The stock trades about -0.03 of its potential returns per unit of risk. The Entain Plc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  844.00  in Entain Plc on December 28, 2024 and sell it today you would lose (39.00) from holding Entain Plc or give up 4.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Gan  vs.  Entain Plc

Gan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Gan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Entain Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entain Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Entain Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Gan and Entain Plc

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

The idea behind Gan and Entain Plc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.