Correlation Between Tat Techno and MGM Resorts
Can any of the company-specific risk be diversified away by investing in both Tat Techno 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 Tat Techno and MGM Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tat Techno and MGM Resorts International, you can compare the effects of market volatilities on Tat Techno 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 Tat Techno with a short position of MGM Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tat Techno and MGM Resorts.
Diversification Opportunities for Tat Techno and MGM Resorts
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tat and MGM is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Tat Techno 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 Tat Techno 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 Tat Techno 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 Tat Techno i.e., Tat Techno and MGM Resorts go up and down completely randomly.
Pair Corralation between Tat Techno and MGM Resorts
Given the investment horizon of 90 days Tat Techno is expected to generate 3.67 times more return on investment than MGM Resorts. However, Tat Techno is 3.67 times more volatile than MGM Resorts International. It trades about 0.32 of its potential returns per unit of risk. MGM Resorts International is currently generating about 0.03 per unit of risk. If you would invest 1,923 in Tat Techno on September 12, 2024 and sell it today you would earn a total of 713.00 from holding Tat Techno or generate 37.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tat Techno vs. MGM Resorts International
Performance |
| Timeline |
| Tat Techno |
| MGM Resorts International |
Tat Techno and MGM Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tat Techno and MGM Resorts
The main advantage of trading using opposite Tat Techno and MGM Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tat Techno 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.| Tat Techno vs. Innovative Solutions and | Tat Techno vs. CPI Aerostructures | Tat Techno vs. Air Industries Group | Tat Techno vs. Ballistic Recovery Systems |
| MGM Resorts vs. Wynn Resorts Limited | MGM Resorts vs. Caesars Entertainment | MGM Resorts vs. Melco Resorts Entertainment | MGM Resorts vs. Penn National Gaming |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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