Correlation Between Citigroup and MGM Resorts
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and MGM Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and MGM Resorts International, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of MGM Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and MGM Resorts.
Diversification Opportunities for Citigroup and MGM Resorts
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citigroup and MGM is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup 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 Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and MGM Resorts go up and down completely randomly.
Pair Corralation between Citigroup and MGM Resorts
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.37 times more return on investment than MGM Resorts. However, Citigroup is 1.37 times more volatile than MGM Resorts International. It trades about 0.45 of its potential returns per unit of risk. MGM Resorts International is currently generating about -0.01 per unit of risk. If you would invest 6,994 in Citigroup on November 2, 2024 and sell it today you would earn a total of 1,192 from holding Citigroup or generate 17.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Citigroup vs. MGM Resorts International
Performance |
| Timeline |
| Citigroup |
| MGM Resorts International |
Citigroup and MGM Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and MGM Resorts
The main advantage of trading using opposite Citigroup and MGM Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. Royal Bank of | Citigroup vs. Nu Holdings | Citigroup vs. HSBC Holdings PLC | Citigroup vs. Canadian Imperial Bank |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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