Correlation Between Nagacorp and Century Casinos
Can any of the company-specific risk be diversified away by investing in both Nagacorp and Century Casinos 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 Nagacorp and Century Casinos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nagacorp and Century Casinos, you can compare the effects of market volatilities on Nagacorp and Century Casinos 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 Nagacorp with a short position of Century Casinos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nagacorp and Century Casinos.
Diversification Opportunities for Nagacorp and Century Casinos
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nagacorp and Century is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nagacorp and Century Casinos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Casinos and Nagacorp 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 Nagacorp are associated (or correlated) with Century Casinos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Casinos has no effect on the direction of Nagacorp i.e., Nagacorp and Century Casinos go up and down completely randomly.
Pair Corralation between Nagacorp and Century Casinos
Assuming the 90 days horizon Nagacorp is expected to generate 1.25 times more return on investment than Century Casinos. However, Nagacorp is 1.25 times more volatile than Century Casinos. It trades about 0.11 of its potential returns per unit of risk. Century Casinos is currently generating about -0.15 per unit of risk. If you would invest 35.00 in Nagacorp on December 3, 2024 and sell it today you would earn a total of 6.00 from holding Nagacorp or generate 17.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 73.77% |
Values | Daily Returns |
Nagacorp vs. Century Casinos
Performance |
Timeline |
Nagacorp |
Century Casinos |
Nagacorp and Century Casinos Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nagacorp and Century Casinos
The main advantage of trading using opposite Nagacorp and Century Casinos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nagacorp position performs unexpectedly, Century Casinos 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 Century Casinos will offset losses from the drop in Century Casinos' long position.Nagacorp vs. Banyan Tree Holdings | Nagacorp vs. Wynn Macau | Nagacorp vs. MGM China Holdings | Nagacorp vs. Table Trac |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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