Correlation Between Monarch Casino and Red Rock
Can any of the company-specific risk be diversified away by investing in both Monarch Casino and Red Rock 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 Monarch Casino and Red Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monarch Casino Resort and Red Rock Resorts, you can compare the effects of market volatilities on Monarch Casino and Red Rock 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 Monarch Casino with a short position of Red Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monarch Casino and Red Rock.
Diversification Opportunities for Monarch Casino and Red Rock
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monarch and Red is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Monarch Casino Resort and Red Rock Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Rock Resorts and Monarch Casino 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 Monarch Casino Resort are associated (or correlated) with Red Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Rock Resorts has no effect on the direction of Monarch Casino i.e., Monarch Casino and Red Rock go up and down completely randomly.
Pair Corralation between Monarch Casino and Red Rock
Given the investment horizon of 90 days Monarch Casino is expected to generate 1.86 times less return on investment than Red Rock. But when comparing it to its historical volatility, Monarch Casino Resort is 1.39 times less risky than Red Rock. It trades about 0.02 of its potential returns per unit of risk. Red Rock Resorts is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,065 in Red Rock Resorts on August 24, 2024 and sell it today you would earn a total of 1,020 from holding Red Rock Resorts or generate 25.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monarch Casino Resort vs. Red Rock Resorts
Performance |
| Timeline |
| Monarch Casino Resort |
| Red Rock Resorts |
Monarch Casino and Red Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monarch Casino and Red Rock
The main advantage of trading using opposite Monarch Casino and Red Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monarch Casino position performs unexpectedly, Red Rock 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 Red Rock will offset losses from the drop in Red Rock's long position.| Monarch Casino vs. Golden Entertainment | Monarch Casino vs. Red Rock Resorts | Monarch Casino vs. Century Casinos | Monarch Casino vs. Ballys Corp |
| Red Rock vs. Golden Entertainment | Red Rock vs. Century Casinos | Red Rock vs. Studio City International | Red Rock vs. Ballys Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |