Correlation Between ENTAIN PLC and MGM Resorts
Can any of the company-specific risk be diversified away by investing in both ENTAIN PLC and MGM 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 ENTAIN PLC and MGM Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENTAIN PLC UNSPADR1 and MGM Resorts International, you can compare the effects of market volatilities on ENTAIN PLC and MGM 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 ENTAIN PLC with a short position of MGM Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENTAIN PLC and MGM Resorts.
Diversification Opportunities for ENTAIN PLC and MGM Resorts
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ENTAIN and MGM is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ENTAIN PLC UNSPADR1 and MGM Resorts International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGM Resorts International and ENTAIN PLC 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 ENTAIN PLC UNSPADR1 are associated (or correlated) with MGM Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGM Resorts International has no effect on the direction of ENTAIN PLC i.e., ENTAIN PLC and MGM Resorts go up and down completely randomly.
Pair Corralation between ENTAIN PLC and MGM Resorts
Assuming the 90 days trading horizon ENTAIN PLC UNSPADR1 is expected to under-perform the MGM Resorts. In addition to that, ENTAIN PLC is 2.06 times more volatile than MGM Resorts International. It trades about -0.25 of its total potential returns per unit of risk. MGM Resorts International is currently generating about -0.07 per unit of volatility. If you would invest 3,248 in MGM Resorts International on October 20, 2024 and sell it today you would lose (58.00) from holding MGM Resorts International or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENTAIN PLC UNSPADR1 vs. MGM Resorts International
Performance |
| Timeline |
| ENTAIN PLC UNSPADR1 |
| MGM Resorts International |
ENTAIN PLC and MGM Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENTAIN PLC and MGM Resorts
The main advantage of trading using opposite ENTAIN PLC and MGM Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENTAIN PLC position performs unexpectedly, MGM 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 MGM Resorts will offset losses from the drop in MGM Resorts' long position.| ENTAIN PLC vs. China Resources Beer | ENTAIN PLC vs. BORR DRILLING NEW | ENTAIN PLC vs. BE Semiconductor Industries | ENTAIN PLC vs. Tsingtao Brewery |
| MGM Resorts vs. Las Vegas Sands | MGM Resorts vs. Galaxy Entertainment Group | MGM Resorts vs. Sands China | MGM Resorts vs. Wynn Resorts Limited |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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