Correlation Between Century Casinos and MGM China
Can any of the company-specific risk be diversified away by investing in both Century Casinos and MGM China 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 Century Casinos and MGM China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Casinos and MGM China Holdings, you can compare the effects of market volatilities on Century Casinos and MGM China 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 Century Casinos with a short position of MGM China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Casinos and MGM China.
Diversification Opportunities for Century Casinos and MGM China
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Century and MGM is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Century Casinos and MGM China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGM China Holdings and Century Casinos 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 Century Casinos are associated (or correlated) with MGM China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGM China Holdings has no effect on the direction of Century Casinos i.e., Century Casinos and MGM China go up and down completely randomly.
Pair Corralation between Century Casinos and MGM China
Given the investment horizon of 90 days Century Casinos is expected to generate 0.86 times more return on investment than MGM China. However, Century Casinos is 1.17 times less risky than MGM China. It trades about 0.42 of its potential returns per unit of risk. MGM China Holdings is currently generating about -0.21 per unit of risk. If you would invest 322.00 in Century Casinos on August 29, 2024 and sell it today you would earn a total of 144.00 from holding Century Casinos or generate 44.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Casinos vs. MGM China Holdings
Performance |
| Timeline |
| Century Casinos |
| MGM China Holdings |
Century Casinos and MGM China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Casinos and MGM China
The main advantage of trading using opposite Century Casinos and MGM China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Casinos position performs unexpectedly, MGM China 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 China will offset losses from the drop in MGM China's long position.| Century Casinos vs. Golden Entertainment | Century Casinos vs. Monarch Casino Resort | Century Casinos vs. Red Rock Resorts | Century Casinos vs. Studio City International |
| MGM China vs. Studio City International | MGM China vs. Monarch Casino Resort | MGM China vs. Playa Hotels Resorts | MGM China vs. Las Vegas Sands |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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