Correlation Between Golden Entertainment and Table Trac

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

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

Diversification Opportunities for Golden Entertainment and Table Trac

0.1

Correlation Coefficient

Golden Entertainment  Table Trac

Average diversification

The 3 months correlation between Golden and Table is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Golden Entertainment and Table Trac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Table Trac and Golden 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 Golden Entertainment are associated (or correlated) with Table Trac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Table Trac has no effect on the direction of Golden Entertainment i.e., Golden Entertainment and Table Trac go up and down completely randomly.

Pair Corralation between Golden Entertainment and Table Trac

Given the investment horizon of 90 days Golden Entertainment is expected to under-perform the Table Trac. But the stock apears to be less risky and, when comparing its historical volatility, Golden Entertainment is 3.35 times less risky than Table Trac. The stock trades about -0.07 of its potential returns per unit of risk. The Table Trac is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  394.00  in Table Trac on September 14, 2024 and sell it today you would earn a total of  31.00  from holding Table Trac or generate 7.87% return on investment over 90 days.

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

Golden Entertainment  vs.  Table Trac

Golden Entertainment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Entertainment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Golden Entertainment is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Table Trac

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Golden Entertainment and Table Trac

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

The idea behind Golden Entertainment and Table Trac 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.

Check out your portfolio center.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.