Correlation Between Red Rock and Table Trac
Can any of the company-specific risk be diversified away by investing in both Red Rock and Table Trac 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 Red Rock and Table Trac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Rock Resorts and Table Trac, you can compare the effects of market volatilities on Red Rock and Table Trac 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 Red Rock with a short position of Table Trac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Rock and Table Trac.
Diversification Opportunities for Red Rock and Table Trac
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Red and Table is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Red Rock Resorts and Table Trac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Table Trac and Red Rock 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 Red Rock Resorts are associated (or correlated) with Table Trac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Table Trac has no effect on the direction of Red Rock i.e., Red Rock and Table Trac go up and down completely randomly.
Pair Corralation between Red Rock and Table Trac
Considering the 90-day investment horizon Red Rock Resorts is expected to under-perform the Table Trac. But the stock apears to be less risky and, when comparing its historical volatility, Red Rock Resorts is 1.38 times less risky than Table Trac. The stock trades about -0.14 of its potential returns per unit of risk. The Table Trac is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 405.00 in Table Trac on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Table Trac or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Rock Resorts vs. Table Trac
Performance |
| Timeline |
| Red Rock Resorts |
| Table Trac |
Red Rock and Table Trac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Rock and Table Trac
The main advantage of trading using opposite Red Rock and Table Trac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Rock position performs unexpectedly, Table Trac 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 Table Trac will offset losses from the drop in Table Trac's long position.| Red Rock vs. Golden Entertainment | Red Rock vs. Century Casinos | Red Rock vs. Studio City International | Red Rock vs. Ballys Corp |
| Table Trac vs. Studio City International | Table Trac vs. Monarch Casino Resort | Table Trac vs. Playa Hotels Resorts | Table Trac vs. Las Vegas Sands |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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