Correlation Between Games Workshop and Las Vegas

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

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

Diversification Opportunities for Games Workshop and Las Vegas

0.1

Correlation Coefficient

Games Workshop  Las Vegas

Average diversification

The 3 months correlation between Games and Las is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group 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 Games Workshop 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 Games Workshop Group 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 Games Workshop i.e., Games Workshop and Las Vegas go up and down completely randomly.

Pair Corralation between Games Workshop and Las Vegas

Assuming the 90 days trading horizon Games Workshop Group is expected to generate 1.72 times more return on investment than Las Vegas. However, Games Workshop is 1.72 times more volatile than Las Vegas Sands. It trades about 0.13 of its potential returns per unit of risk. Las Vegas Sands is currently generating about -0.2 per unit of risk. If you would invest  1,180,816  in Games Workshop Group on October 26, 2024 and sell it today you would earn a total of  250,184  from holding Games Workshop Group or generate 21.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Games Workshop Group  vs.  Las Vegas Sands

Games Workshop Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Games Workshop exhibited solid returns over the last few months and may actually be approaching a breakup point.

Las Vegas Sands

Risk-Adjusted Performance

0 of 100

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Games Workshop and Las Vegas

The main advantage of trading using opposite Games Workshop and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop 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 Games Workshop Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.