Correlation Between SkyCity Entertainment and Golden Entertainment

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

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

Diversification Opportunities for SkyCity Entertainment and Golden Entertainment

0.0

Correlation Coefficient

SkyCity Entertainment  Golden Entertainment

Pay attention - limited upside

The 3 months correlation between SkyCity and Golden is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SkyCity Entertainment Group and Golden Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Entertainment and SkyCity 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 SkyCity Entertainment Group are associated (or correlated) with Golden Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Entertainment has no effect on the direction of SkyCity Entertainment i.e., SkyCity Entertainment and Golden Entertainment go up and down completely randomly.

Pair Corralation between SkyCity Entertainment and Golden Entertainment

Assuming the 90 days horizon SkyCity Entertainment Group is expected to generate 1.09 times more return on investment than Golden Entertainment. However, SkyCity Entertainment is 1.09 times more volatile than Golden Entertainment. It trades about 0.0 of its potential returns per unit of risk. Golden Entertainment is currently generating about -0.01 per unit of risk. If you would invest  99.00  in SkyCity Entertainment Group on September 14, 2024 and sell it today you would lose (7.00) from holding SkyCity Entertainment Group or give up 7.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	74.35%
Values	Daily Returns

SkyCity Entertainment Group  vs.  Golden Entertainment

SkyCity Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SkyCity Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SkyCity Entertainment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Golden Entertainment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Entertainment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Golden Entertainment is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SkyCity Entertainment and Golden Entertainment

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

The idea behind SkyCity Entertainment Group and Golden Entertainment 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.