Correlation Between Gaming Leisure and Compugen

Can any of the company-specific risk be diversified away by investing in both Gaming Leisure and Compugen 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 Compugen 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 Compugen, you can compare the effects of market volatilities on Gaming Leisure and Compugen 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 Compugen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Leisure and Compugen.

Diversification Opportunities for Gaming Leisure and Compugen

0.13

Correlation Coefficient

Gaming Leisure  Compugen

Average diversification

The 3 months correlation between Gaming and Compugen is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Leisure Properties and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen 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 Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Gaming Leisure i.e., Gaming Leisure and Compugen go up and down completely randomly.

Pair Corralation between Gaming Leisure and Compugen

Given the investment horizon of 90 days Gaming Leisure Properties is expected to generate 0.5 times more return on investment than Compugen. However, Gaming Leisure Properties is 2.0 times less risky than Compugen. It trades about -0.12 of its potential returns per unit of risk. Compugen is currently generating about -0.38 per unit of risk. If you would invest  4,520  in Gaming Leisure Properties on January 26, 2024 and sell it today you would lose (175.00) from holding Gaming Leisure Properties or give up 3.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	76.19%
Values	Daily Returns

Gaming Leisure Properties  vs.  Compugen

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

Compugen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compugen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Compugen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gaming Leisure and Compugen

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

The idea behind Gaming Leisure Properties and Compugen 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 CEOs Directory module to screen CEOs from public companies around the world.