Correlation Between Red Rock and Sadot

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

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

Diversification Opportunities for Red Rock and Sadot

-0.36

Correlation Coefficient

Red Rock  Sadot

Very good diversification

The 3 months correlation between Red and Sadot is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Red Rock Resorts and Sadot Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sadot Group and Red Rock 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 Red Rock Resorts are associated (or correlated) with Sadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sadot Group has no effect on the direction of Red Rock i.e., Red Rock and Sadot go up and down completely randomly.

Pair Corralation between Red Rock and Sadot

Considering the 90-day investment horizon Red Rock Resorts is expected to generate 0.28 times more return on investment than Sadot. However, Red Rock Resorts is 3.62 times less risky than Sadot. It trades about 0.18 of its potential returns per unit of risk. Sadot Group is currently generating about -0.06 per unit of risk. If you would invest  4,570  in Red Rock Resorts on May 10, 2025 and sell it today you would earn a total of  1,170  from holding Red Rock Resorts or generate 25.6% return on investment over 90 days.

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

Red Rock Resorts  vs.  Sadot Group

Red Rock Resorts

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Red Rock Resorts are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Red Rock reported solid returns over the last few months and may actually be approaching a breakup point.

Sadot Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Sadot Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Red Rock and Sadot

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

The idea behind Red Rock Resorts and Sadot Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.