Correlation Between Portillos and Ballys Corp

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

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

Diversification Opportunities for Portillos and Ballys Corp

-0.43

Correlation Coefficient

Portillos  Ballys Corp

Very good diversification

The 3 months correlation between Portillos and Ballys is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Portillos and Ballys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballys Corp and Portillos 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 Portillos are associated (or correlated) with Ballys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballys Corp has no effect on the direction of Portillos i.e., Portillos and Ballys Corp go up and down completely randomly.

Pair Corralation between Portillos and Ballys Corp

Given the investment horizon of 90 days Portillos is expected to generate 0.52 times more return on investment than Ballys Corp. However, Portillos is 1.93 times less risky than Ballys Corp. It trades about 0.12 of its potential returns per unit of risk. Ballys Corp is currently generating about -0.04 per unit of risk. If you would invest  910.00  in Portillos on December 30, 2024 and sell it today you would earn a total of  280.00  from holding Portillos or generate 30.77% return on investment over 90 days.

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

Portillos  vs.  Ballys Corp

Portillos

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Portillos are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Portillos displayed solid returns over the last few months and may actually be approaching a breakup point.

Ballys Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ballys Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Portillos and Ballys Corp

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

The idea behind Portillos and Ballys Corp 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.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.