Correlation Between MGM Resorts and Las Vegas
Can any of the company-specific risk be diversified away by investing in both MGM Resorts and Las Vegas 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 Resorts and Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGM Resorts International and Las Vegas Sands, you can compare the effects of market volatilities on MGM Resorts and Las Vegas 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 Resorts with a short position of Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGM Resorts and Las Vegas.
Diversification Opportunities for MGM Resorts and Las Vegas
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MGM and Las is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding MGM Resorts International and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands and MGM Resorts 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 Resorts International are associated (or correlated) with Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of MGM Resorts i.e., MGM Resorts and Las Vegas go up and down completely randomly.
Pair Corralation between MGM Resorts and Las Vegas
Considering the 90-day investment horizon MGM Resorts International is expected to under-perform the Las Vegas. In addition to that, MGM Resorts is 1.18 times more volatile than Las Vegas Sands. It trades about -0.02 of its total potential returns per unit of risk. Las Vegas Sands is currently generating about -0.01 per unit of volatility. If you would invest 5,379 in Las Vegas Sands on August 27, 2024 and sell it today you would lose (371.00) from holding Las Vegas Sands or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGM Resorts International vs. Las Vegas Sands
Performance |
| Timeline |
| MGM Resorts International |
| Las Vegas Sands |
MGM Resorts and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGM Resorts and Las Vegas
The main advantage of trading using opposite MGM Resorts and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGM Resorts position performs unexpectedly, Las Vegas 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 Las Vegas will offset losses from the drop in Las Vegas' long position.| MGM Resorts vs. Wynn Resorts Limited | MGM Resorts vs. Caesars Entertainment | MGM Resorts vs. Melco Resorts Entertainment | MGM Resorts vs. Penn National Gaming |
| Las Vegas vs. MGM Resorts International | Las Vegas vs. Caesars Entertainment | Las Vegas vs. Penn National Gaming | Las Vegas vs. Melco Resorts 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |