Correlation Between Gan and Churchill Downs

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

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

Diversification Opportunities for Gan and Churchill Downs

-0.21

Correlation Coefficient

Gan  Churchill Downs

Very good diversification

The 3 months correlation between Gan and Churchill is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Gan and Churchill Downs Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Downs rporated and Gan 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 Gan are associated (or correlated) with Churchill Downs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Downs rporated has no effect on the direction of Gan i.e., Gan and Churchill Downs go up and down completely randomly.

Pair Corralation between Gan and Churchill Downs

Considering the 90-day investment horizon Gan is expected to under-perform the Churchill Downs. But the stock apears to be less risky and, when comparing its historical volatility, Gan is 1.29 times less risky than Churchill Downs. The stock trades about -0.31 of its potential returns per unit of risk. The Churchill Downs Incorporated is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  12,391  in Churchill Downs Incorporated on January 31, 2024 and sell it today you would earn a total of  623.00  from holding Churchill Downs Incorporated or generate 5.03% return on investment over 90 days.

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

Gan  vs.  Churchill Downs Incorporated

Gan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Churchill Downs rporated

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Churchill Downs Incorporated are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Churchill Downs may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Gan and Churchill Downs

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

The idea behind Gan and Churchill Downs Incorporated 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.