Correlation Between Galaxy Entertainment and Las Vegas

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

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

Diversification Opportunities for Galaxy Entertainment and Las Vegas

0.8

Correlation Coefficient

Galaxy Entertainment  Las Vegas

Very poor diversification

The 3 months correlation between Galaxy and Las is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Galaxy Entertainment 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 Galaxy 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 Galaxy Entertainment 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 Galaxy Entertainment i.e., Galaxy Entertainment and Las Vegas go up and down completely randomly.

Pair Corralation between Galaxy Entertainment and Las Vegas

Assuming the 90 days horizon Galaxy Entertainment Group is expected to generate 1.11 times more return on investment than Las Vegas. However, Galaxy Entertainment is 1.11 times more volatile than Las Vegas Sands. It trades about 0.06 of its potential returns per unit of risk. Las Vegas Sands is currently generating about 0.03 per unit of risk. If you would invest  2,029  in Galaxy Entertainment Group on December 4, 2024 and sell it today you would earn a total of  39.00  from holding Galaxy Entertainment Group or generate 1.92% return on investment over 90 days.

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

Galaxy Entertainment Group  vs.  Las Vegas Sands

Galaxy Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Galaxy Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Las Vegas Sands

Risk-Adjusted Performance

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

Pair Trading with Galaxy Entertainment and Las Vegas

The main advantage of trading using opposite Galaxy Entertainment and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galaxy Entertainment 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 Galaxy Entertainment 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.