Correlation Between Gaming Leisure and American Tower

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

Diversification Opportunities for Gaming Leisure and American Tower

0.66

Correlation Coefficient

Gaming Leisure  American Tower

Poor diversification

The 3 months correlation between Gaming and American is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Leisure Properties and American Tower Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Tower Corp 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 American Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Tower Corp has no effect on the direction of Gaming Leisure i.e., Gaming Leisure and American Tower go up and down completely randomly.

Pair Corralation between Gaming Leisure and American Tower

Given the investment horizon of 90 days Gaming Leisure Properties is expected to generate 0.68 times more return on investment than American Tower. However, Gaming Leisure Properties is 1.47 times less risky than American Tower. It trades about 0.03 of its potential returns per unit of risk. American Tower Corp is currently generating about -0.04 per unit of risk. If you would invest  4,557  in Gaming Leisure Properties on May 5, 2025 and sell it today you would earn a total of  58.00  from holding Gaming Leisure Properties or generate 1.27% return on investment over 90 days.

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

Gaming Leisure Properties  vs.  American Tower Corp

Gaming Leisure Properties

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gaming Leisure Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Gaming Leisure is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

American Tower Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Tower Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, American Tower is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gaming Leisure and American Tower

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

The idea behind Gaming Leisure Properties and American Tower Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.