Correlation Between Gaming Leisure and Thai Union

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

Diversification Opportunities for Gaming Leisure and Thai Union

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Gaming and Thai is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Leisure Properties and Thai Union Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Union Group and Gaming Leisure 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 Gaming Leisure Properties are associated (or correlated) with Thai Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Union Group has no effect on the direction of Gaming Leisure i.e., Gaming Leisure and Thai Union go up and down completely randomly.

Pair Corralation between Gaming Leisure and Thai Union

Given the investment horizon of 90 days Gaming Leisure Properties is expected to generate 0.75 times more return on investment than Thai Union. However, Gaming Leisure Properties is 1.33 times less risky than Thai Union. It trades about 0.15 of its potential returns per unit of risk. Thai Union Group is currently generating about 0.01 per unit of risk. If you would invest  4,478  in Gaming Leisure Properties on December 30, 2023 and sell it today you would earn a total of  129.00  from holding Gaming Leisure Properties or generate 2.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Gaming Leisure Properties  vs.  Thai Union Group

 Performance 
       Timeline  
Gaming Leisure Properties 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Gaming Leisure Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Gaming Leisure is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.
Thai Union Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Thai Union Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Thai Union is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Gaming Leisure and Thai Union Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gaming Leisure and Thai Union

The main advantage of trading using opposite Gaming Leisure and Thai Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Leisure position performs unexpectedly, Thai Union 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 Thai Union will offset losses from the drop in Thai Union's long position.
The idea behind Gaming Leisure Properties and Thai Union Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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