Correlation Between IPC MEXICO and MGM Resorts
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO 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 IPC MEXICO and MGM Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPC MEXICO and MGM Resorts International, you can compare the effects of market volatilities on IPC MEXICO 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 IPC MEXICO with a short position of MGM Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and MGM Resorts.
Diversification Opportunities for IPC MEXICO and MGM Resorts
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IPC and MGM is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO 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 IPC MEXICO 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 IPC MEXICO 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 IPC MEXICO i.e., IPC MEXICO and MGM Resorts go up and down completely randomly.
Pair Corralation between IPC MEXICO and MGM Resorts
Assuming the 90 days trading horizon IPC MEXICO is expected to under-perform the MGM Resorts. But the index apears to be less risky and, when comparing its historical volatility, IPC MEXICO is 2.86 times less risky than MGM Resorts. The index trades about -0.11 of its potential returns per unit of risk. The MGM Resorts International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 75,000 in MGM Resorts International on September 2, 2024 and sell it today you would earn a total of 2,800 from holding MGM Resorts International or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
IPC MEXICO vs. MGM Resorts International
Performance |
| Timeline |
IPC MEXICO and MGM Resorts Volatility Contrast
Predicted Return Density |
| Returns |
IPC MEXICO
Pair trading matchups for IPC MEXICO
MGM Resorts International
Pair trading matchups for MGM Resorts
Pair Trading with IPC MEXICO and MGM Resorts
The main advantage of trading using opposite IPC MEXICO and MGM Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO 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.| IPC MEXICO vs. Grupo Sports World | IPC MEXICO vs. Capital One Financial | IPC MEXICO vs. Prudential Financial | IPC MEXICO vs. FibraHotel |
| MGM Resorts vs. Applied Materials | MGM Resorts vs. CVS Health | MGM Resorts vs. McEwen Mining | MGM Resorts vs. Cognizant Technology Solutions |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |