Correlation Between Vail Resorts and Las Vegas

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Can any of the company-specific risk be diversified away by investing in both Vail Resorts 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 Vail Resorts and Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vail Resorts and Las Vegas Sands, you can compare the effects of market volatilities on Vail Resorts 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 Vail Resorts with a short position of Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vail Resorts and Las Vegas.

Diversification Opportunities for Vail Resorts and Las Vegas

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between Vail and Las is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vail Resorts 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 Vail Resorts 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 Vail Resorts 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 Vail Resorts i.e., Vail Resorts and Las Vegas go up and down completely randomly.

Pair Corralation between Vail Resorts and Las Vegas

Considering the 90-day investment horizon Vail Resorts is expected to under-perform the Las Vegas. But the stock apears to be less risky and, when comparing its historical volatility, Vail Resorts is 1.08 times less risky than Las Vegas. The stock trades about -0.02 of its potential returns per unit of risk. The Las Vegas Sands is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  5,610  in Las Vegas Sands on October 3, 2024 and sell it today you would lose (474.00) from holding Las Vegas Sands or give up 8.45% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Vail Resorts  vs.  Las Vegas Sands

 Performance 
       Timeline  
Vail Resorts 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Vail Resorts are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Vail Resorts may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Las Vegas Sands 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 comparatively stable basic indicators, Las Vegas is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Vail Resorts and Las Vegas Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vail Resorts and Las Vegas

The main advantage of trading using opposite Vail Resorts and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vail Resorts 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 Vail Resorts 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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