Correlation Between Gaming Leisure and Outfront Media

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

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

Diversification Opportunities for Gaming Leisure and Outfront Media

-0.53

Correlation Coefficient

Gaming Leisure  Outfront Media

Excellent diversification

The 3 months correlation between Gaming and Outfront is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Leisure Properties and Outfront Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outfront Media and Gaming Leisure 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 Gaming Leisure Properties are associated (or correlated) with Outfront Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outfront Media has no effect on the direction of Gaming Leisure i.e., Gaming Leisure and Outfront Media go up and down completely randomly.

Pair Corralation between Gaming Leisure and Outfront Media

Given the investment horizon of 90 days Gaming Leisure Properties is expected to generate 0.56 times more return on investment than Outfront Media. However, Gaming Leisure Properties is 1.78 times less risky than Outfront Media. It trades about 0.11 of its potential returns per unit of risk. Outfront Media is currently generating about -0.05 per unit of risk. If you would invest  4,700  in Gaming Leisure Properties on December 29, 2024 and sell it today you would earn a total of  340.00  from holding Gaming Leisure Properties or generate 7.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Gaming Leisure Properties  vs.  Outfront Media

Gaming Leisure Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gaming Leisure Properties are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Gaming Leisure may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Outfront Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Outfront Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Gaming Leisure and Outfront Media

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

The idea behind Gaming Leisure Properties and Outfront Media 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 Global Correlations module to find global opportunities by holding instruments from different markets.