Correlation Between Full House and MGM China
Can any of the company-specific risk be diversified away by investing in both Full House 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 Full House and MGM China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Full House Resorts and MGM China Holdings, you can compare the effects of market volatilities on Full House 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 Full House with a short position of MGM China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Full House and MGM China.
Diversification Opportunities for Full House and MGM China
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Full and MGM is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Full House Resorts 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 Full House 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 Full House Resorts 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 Full House i.e., Full House and MGM China go up and down completely randomly.
Pair Corralation between Full House and MGM China
Considering the 90-day investment horizon Full House Resorts is expected to generate 1.36 times more return on investment than MGM China. However, Full House is 1.36 times more volatile than MGM China Holdings. It trades about -0.03 of its potential returns per unit of risk. MGM China Holdings is currently generating about -0.12 per unit of risk. If you would invest 499.00 in Full House Resorts on August 25, 2024 and sell it today you would lose (13.00) from holding Full House Resorts or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Full House Resorts vs. MGM China Holdings
Performance |
| Timeline |
| Full House Resorts |
| MGM China Holdings |
Full House and MGM China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Full House and MGM China
The main advantage of trading using opposite Full House and MGM China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Full House 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.| Full House vs. Monarch Casino Resort | Full House vs. Red Rock Resorts | Full House vs. Golden Entertainment | Full House vs. Playa Hotels Resorts |
| MGM China vs. SJM Holdings Ltd | MGM China vs. Studio City International | MGM China vs. Monarch Casino Resort | MGM China vs. Playa Hotels Resorts |
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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