Correlation Between Golden Entertainment and Century Casinos

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

By analyzing existing cross correlation between Golden Entertainment and Century Casinos, you can compare the effects of market volatilities on Golden Entertainment and Century Casinos 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 Century Casinos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Entertainment and Century Casinos.

Diversification Opportunities for Golden Entertainment and Century Casinos

0.64

Correlation Coefficient

Golden Entertainment  Century Casinos

Poor diversification

The 3 months correlation between Golden and Century is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Golden Entertainment and Century Casinos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Casinos 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 Century Casinos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Casinos has no effect on the direction of Golden Entertainment i.e., Golden Entertainment and Century Casinos go up and down completely randomly.

Pair Corralation between Golden Entertainment and Century Casinos

Given the investment horizon of 90 days Golden Entertainment is expected to generate 5.85 times less return on investment than Century Casinos. But when comparing it to its historical volatility, Golden Entertainment is 2.38 times less risky than Century Casinos. It trades about 0.06 of its potential returns per unit of risk. Century Casinos is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  144.00  in Century Casinos on May 7, 2025 and sell it today you would earn a total of  66.00  from holding Century Casinos or generate 45.83% return on investment over 90 days.

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

Golden Entertainment  vs.  Century Casinos

Golden Entertainment

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Entertainment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Golden Entertainment may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Century Casinos

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Century Casinos are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Century Casinos showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Golden Entertainment and Century Casinos

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

The idea behind Golden Entertainment and Century Casinos 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 Stocks Directory module to find actively traded stocks across global markets.