Correlation Between Vail Resorts and GENTING SG

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

By analyzing existing cross correlation between Vail Resorts and GENTING SG LTD, you can compare the effects of market volatilities on Vail Resorts and GENTING SG 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 GENTING SG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vail Resorts and GENTING SG.

Diversification Opportunities for Vail Resorts and GENTING SG

-0.72

Correlation Coefficient

Vail Resorts  GENTING SG

Pay attention - limited upside

The 3 months correlation between Vail and GENTING is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vail Resorts and GENTING SG LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENTING SG LTD 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 GENTING SG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENTING SG LTD has no effect on the direction of Vail Resorts i.e., Vail Resorts and GENTING SG go up and down completely randomly.

Pair Corralation between Vail Resorts and GENTING SG

Assuming the 90 days horizon Vail Resorts is expected to generate 0.78 times more return on investment than GENTING SG. However, Vail Resorts is 1.29 times less risky than GENTING SG. It trades about 0.15 of its potential returns per unit of risk. GENTING SG LTD is currently generating about -0.01 per unit of risk. If you would invest  15,575  in Vail Resorts on September 12, 2024 and sell it today you would earn a total of  3,025  from holding Vail Resorts or generate 19.42% return on investment over 90 days.

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

Vail Resorts  vs.  GENTING SG LTD

Vail Resorts

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vail Resorts are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vail Resorts reported solid returns over the last few months and may actually be approaching a breakup point.

GENTING SG LTD

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vail Resorts and GENTING SG

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

The idea behind Vail Resorts and GENTING SG LTD 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.