Correlation Between MGM China and Full House
Can any of the company-specific risk be diversified away by investing in both MGM China and Full House 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 MGM China and Full House into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGM China Holdings and Full House Resorts, you can compare the effects of market volatilities on MGM China and Full House 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 MGM China with a short position of Full House. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGM China and Full House.
Diversification Opportunities for MGM China and Full House
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MGM and Full is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding MGM China Holdings and Full House Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Full House Resorts and MGM China 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 MGM China Holdings are associated (or correlated) with Full House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Full House Resorts has no effect on the direction of MGM China i.e., MGM China and Full House go up and down completely randomly.
Pair Corralation between MGM China and Full House
Assuming the 90 days horizon MGM China Holdings is expected to generate 1.53 times more return on investment than Full House. However, MGM China is 1.53 times more volatile than Full House Resorts. It trades about 0.03 of its potential returns per unit of risk. Full House Resorts is currently generating about -0.01 per unit of risk. If you would invest 89.00 in MGM China Holdings on August 25, 2024 and sell it today you would earn a total of 16.00 from holding MGM China Holdings or generate 17.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.6% |
| Values | Daily Returns |
MGM China Holdings vs. Full House Resorts
Performance |
| Timeline |
| MGM China Holdings |
| Full House Resorts |
MGM China and Full House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGM China and Full House
The main advantage of trading using opposite MGM China and Full House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGM China position performs unexpectedly, Full House 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 Full House will offset losses from the drop in Full House's long position.| MGM China vs. Banyan Tree Holdings | MGM China vs. Nagacorp | MGM China vs. Wynn Macau | MGM China vs. Table Trac |
| Full House vs. Monarch Casino Resort | Full House vs. Red Rock Resorts | Full House vs. Golden Entertainment | Full House 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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