Correlation Between Xtrackers ShortDAX and MGM Resorts
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX 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 Xtrackers ShortDAX and MGM Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and MGM Resorts International, you can compare the effects of market volatilities on Xtrackers ShortDAX 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 Xtrackers ShortDAX with a short position of MGM Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and MGM Resorts.
Diversification Opportunities for Xtrackers ShortDAX and MGM Resorts
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and MGM is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX 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 Xtrackers ShortDAX 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 Xtrackers ShortDAX 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 Xtrackers ShortDAX i.e., Xtrackers ShortDAX and MGM Resorts go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and MGM Resorts
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the MGM Resorts. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.32 times less risky than MGM Resorts. The etf trades about -0.04 of its potential returns per unit of risk. The MGM Resorts International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,835 in MGM Resorts International on August 31, 2024 and sell it today you would lose (306.00) from holding MGM Resorts International or give up 7.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. MGM Resorts International
Performance |
| Timeline |
| Xtrackers ShortDAX |
| MGM Resorts International |
Xtrackers ShortDAX and MGM Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and MGM Resorts
The main advantage of trading using opposite Xtrackers ShortDAX and MGM Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX 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.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| MGM Resorts vs. Superior Plus Corp | MGM Resorts vs. NMI Holdings | MGM Resorts vs. Origin Agritech | MGM Resorts vs. SIVERS SEMICONDUCTORS AB |
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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