Correlation Between Las Vegas and TSOGO SUN

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

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

Diversification Opportunities for Las Vegas and TSOGO SUN

0.27

Correlation Coefficient

Las Vegas  TSOGO SUN

Modest diversification

The 3 months correlation between Las and TSOGO is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Las Vegas Sands and TSOGO SUN GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSOGO SUN GAMING and Las Vegas 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 Las Vegas Sands are associated (or correlated) with TSOGO SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSOGO SUN GAMING has no effect on the direction of Las Vegas i.e., Las Vegas and TSOGO SUN go up and down completely randomly.

Pair Corralation between Las Vegas and TSOGO SUN

Assuming the 90 days horizon Las Vegas Sands is expected to generate 1.09 times more return on investment than TSOGO SUN. However, Las Vegas is 1.09 times more volatile than TSOGO SUN GAMING. It trades about 0.28 of its potential returns per unit of risk. TSOGO SUN GAMING is currently generating about -0.06 per unit of risk. If you would invest  3,572  in Las Vegas Sands on September 4, 2024 and sell it today you would earn a total of  1,657  from holding Las Vegas Sands or generate 46.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Las Vegas Sands  vs.  TSOGO SUN GAMING

Las Vegas Sands

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Las Vegas Sands are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Las Vegas reported solid returns over the last few months and may actually be approaching a breakup point.

TSOGO SUN GAMING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TSOGO SUN GAMING has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Las Vegas and TSOGO SUN

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

The idea behind Las Vegas Sands and TSOGO SUN GAMING 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.