Correlation Between Table Trac and MGM China
Can any of the company-specific risk be diversified away by investing in both Table Trac and MGM China 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 Table Trac and MGM China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Table Trac and MGM China Holdings, you can compare the effects of market volatilities on Table Trac and MGM China 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 Table Trac with a short position of MGM China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Table Trac and MGM China.
Diversification Opportunities for Table Trac and MGM China
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Table and MGM is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Table Trac and MGM China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGM China Holdings and Table Trac 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 Table Trac are associated (or correlated) with MGM China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGM China Holdings has no effect on the direction of Table Trac i.e., Table Trac and MGM China go up and down completely randomly.
Pair Corralation between Table Trac and MGM China
Given the investment horizon of 90 days Table Trac is expected to generate 18.06 times less return on investment than MGM China. But when comparing it to its historical volatility, Table Trac is 1.32 times less risky than MGM China. It trades about 0.0 of its potential returns per unit of risk. MGM China Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,053 in MGM China Holdings on August 25, 2024 and sell it today you would earn a total of 417.00 from holding MGM China Holdings or generate 39.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.51% |
| Values | Daily Returns |
Table Trac vs. MGM China Holdings
Performance |
| Timeline |
| Table Trac |
| MGM China Holdings |
Table Trac and MGM China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Table Trac and MGM China
The main advantage of trading using opposite Table Trac and MGM China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Table Trac position performs unexpectedly, MGM China 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 China will offset losses from the drop in MGM China's long position.| Table Trac vs. Banyan Tree Holdings | Table Trac vs. Nagacorp | Table Trac vs. Wynn Macau | Table Trac vs. MGM China Holdings |
| MGM China vs. SJM Holdings Ltd | MGM China vs. Studio City International | MGM China vs. Monarch Casino Resort | MGM China vs. Playa Hotels Resorts |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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