Correlation Between Golden Entertainment and Everi Holdings
Can any of the company-specific risk be diversified away by investing in both Golden Entertainment and Everi Holdings 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 Golden Entertainment and Everi Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Entertainment and Everi Holdings, you can compare the effects of market volatilities on Golden Entertainment and Everi Holdings 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 Golden Entertainment with a short position of Everi Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Entertainment and Everi Holdings.
Diversification Opportunities for Golden Entertainment and Everi Holdings
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Everi is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Golden Entertainment and Everi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everi Holdings and Golden 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 Golden Entertainment are associated (or correlated) with Everi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everi Holdings has no effect on the direction of Golden Entertainment i.e., Golden Entertainment and Everi Holdings go up and down completely randomly.
Pair Corralation between Golden Entertainment and Everi Holdings
Given the investment horizon of 90 days Golden Entertainment is expected to generate 0.6 times more return on investment than Everi Holdings. However, Golden Entertainment is 1.66 times less risky than Everi Holdings. It trades about -0.12 of its potential returns per unit of risk. Everi Holdings is currently generating about -0.11 per unit of risk. If you would invest 3,592 in Golden Entertainment on January 26, 2024 and sell it today you would lose (142.00) from holding Golden Entertainment or give up 3.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Entertainment vs. Everi Holdings
Performance |
| Timeline |
| Golden Entertainment |
| Everi Holdings |
Golden Entertainment and Everi Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Entertainment and Everi Holdings
The main advantage of trading using opposite Golden Entertainment and Everi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Entertainment position performs unexpectedly, Everi Holdings 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 Everi Holdings will offset losses from the drop in Everi Holdings' long position.| Golden Entertainment vs. Marriot Vacations Worldwide | Golden Entertainment vs. Monarch Casino Resort | Golden Entertainment vs. Studio City International | Golden Entertainment vs. Hilton Grand Vacations |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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