Correlation Between Apple and MGM Resorts
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and MGM Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and MGM Resorts International, you can compare the effects of market volatilities on Apple 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 Apple with a short position of MGM Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and MGM Resorts.
Diversification Opportunities for Apple and MGM Resorts
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apple and MGM is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and MGM Resorts go up and down completely randomly.
Pair Corralation between Apple and MGM Resorts
Given the investment horizon of 90 days Apple Inc is expected to generate 0.53 times more return on investment than MGM Resorts. However, Apple Inc is 1.89 times less risky than MGM Resorts. It trades about 0.68 of its potential returns per unit of risk. MGM Resorts International is currently generating about 0.03 per unit of risk. If you would invest 22,423 in Apple Inc on September 12, 2024 and sell it today you would earn a total of 2,503 from holding Apple Inc or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. MGM Resorts International
Performance |
| Timeline |
| Apple Inc |
| MGM Resorts International |
Apple and MGM Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and MGM Resorts
The main advantage of trading using opposite Apple and MGM Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.The idea behind Apple Inc and MGM Resorts International 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.| MGM Resorts vs. Wynn Resorts Limited | MGM Resorts vs. Caesars Entertainment | MGM Resorts vs. Melco Resorts Entertainment | MGM Resorts vs. Penn National Gaming |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |