Correlation Between PlayAGS and Vail Resorts

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

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

Diversification Opportunities for PlayAGS and Vail Resorts

-0.45

Correlation Coefficient

PlayAGS  Vail Resorts

Very good diversification

The 3 months correlation between PlayAGS and Vail is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS and Vail Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vail Resorts and PlayAGS 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 PlayAGS are associated (or correlated) with Vail Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vail Resorts has no effect on the direction of PlayAGS i.e., PlayAGS and Vail Resorts go up and down completely randomly.

Pair Corralation between PlayAGS and Vail Resorts

Considering the 90-day investment horizon PlayAGS is expected to generate 0.13 times more return on investment than Vail Resorts. However, PlayAGS is 7.9 times less risky than Vail Resorts. It trades about 0.19 of its potential returns per unit of risk. Vail Resorts is currently generating about 0.0 per unit of risk. If you would invest  1,131  in PlayAGS on September 2, 2024 and sell it today you would earn a total of  31.00  from holding PlayAGS or generate 2.74% return on investment over 90 days.

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

PlayAGS  vs.  Vail Resorts

PlayAGS

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PlayAGS are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, PlayAGS is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Vail Resorts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vail Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Vail Resorts is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PlayAGS and Vail Resorts

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

The idea behind PlayAGS and Vail Resorts 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.