Correlation Between VICI Properties and Gaming Leisure

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

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

Diversification Opportunities for VICI Properties and Gaming Leisure

0.74

Correlation Coefficient

VICI Properties  Gaming Leisure

Poor diversification

The 3 months correlation between VICI and Gaming is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and Gaming Leisure Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Leisure Properties and VICI Properties 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 VICI Properties are associated (or correlated) with Gaming Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Leisure Properties has no effect on the direction of VICI Properties i.e., VICI Properties and Gaming Leisure go up and down completely randomly.

Pair Corralation between VICI Properties and Gaming Leisure

Given the investment horizon of 90 days VICI Properties is expected to generate 1.03 times more return on investment than Gaming Leisure. However, VICI Properties is 1.03 times more volatile than Gaming Leisure Properties. It trades about -0.05 of its potential returns per unit of risk. Gaming Leisure Properties is currently generating about -0.13 per unit of risk. If you would invest  2,947  in VICI Properties on February 2, 2024 and sell it today you would lose (57.00) from holding VICI Properties or give up 1.93% of portfolio value over 90 days.

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

VICI Properties  vs.  Gaming Leisure Properties

VICI Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VICI Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, VICI Properties is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Gaming Leisure Properties

Risk-Adjusted Performance

0 of 100

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 latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with VICI Properties and Gaming Leisure

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

The idea behind VICI Properties and Gaming Leisure Properties 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.