Correlation Between Century Casinos and Monarch Casino
Can any of the company-specific risk be diversified away by investing in both Century Casinos and Monarch Casino 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 Monarch Casino into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Casinos and Monarch Casino Resort, you can compare the effects of market volatilities on Century Casinos and Monarch Casino 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 Monarch Casino. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Casinos and Monarch Casino.
Diversification Opportunities for Century Casinos and Monarch Casino
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Century and Monarch is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Century Casinos and Monarch Casino Resort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monarch Casino Resort 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 Monarch Casino. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monarch Casino Resort has no effect on the direction of Century Casinos i.e., Century Casinos and Monarch Casino go up and down completely randomly.
Pair Corralation between Century Casinos and Monarch Casino
Given the investment horizon of 90 days Century Casinos is expected to generate 4.32 times more return on investment than Monarch Casino. However, Century Casinos is 4.32 times more volatile than Monarch Casino Resort. It trades about 0.37 of its potential returns per unit of risk. Monarch Casino Resort is currently generating about 0.4 per unit of risk. If you would invest 322.00 in Century Casinos on August 28, 2024 and sell it today you would earn a total of 123.00 from holding Century Casinos or generate 38.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Century Casinos vs. Monarch Casino Resort
Performance |
| Timeline |
| Century Casinos |
| Monarch Casino Resort |
Century Casinos and Monarch Casino Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Casinos and Monarch Casino
The main advantage of trading using opposite Century Casinos and Monarch Casino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Casinos position performs unexpectedly, Monarch Casino 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 Monarch Casino will offset losses from the drop in Monarch Casino'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 |
| Monarch Casino vs. Red Rock Resorts | Monarch Casino vs. Full House Resorts | Monarch Casino vs. Ballys Corp | Monarch Casino vs. Golden Entertainment |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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