Correlation Between Table Trac and MGM Resorts
Can any of the company-specific risk be diversified away by investing in both Table Trac 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 Table Trac and MGM Resorts 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 Resorts International, you can compare the effects of market volatilities on Table Trac 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 Table Trac with a short position of MGM Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Table Trac and MGM Resorts.
Diversification Opportunities for Table Trac and MGM Resorts
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Table and MGM is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Table Trac 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 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 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 Table Trac i.e., Table Trac and MGM Resorts go up and down completely randomly.
Pair Corralation between Table Trac and MGM Resorts
Given the investment horizon of 90 days Table Trac is expected to generate 1.73 times less return on investment than MGM Resorts. But when comparing it to its historical volatility, Table Trac is 1.61 times less risky than MGM Resorts. It trades about 0.17 of its potential returns per unit of risk. MGM Resorts International is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,335 in MGM Resorts International on November 22, 2024 and sell it today you would earn a total of 499.00 from holding MGM Resorts International or generate 14.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Table Trac vs. MGM Resorts International
Performance |
| Timeline |
| Table Trac |
| MGM Resorts International |
Table Trac and MGM Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Table Trac and MGM Resorts
The main advantage of trading using opposite Table Trac and MGM Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Table Trac 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.| Table Trac vs. Banyan Tree Holdings | Table Trac vs. Nagacorp | Table Trac vs. Wynn Macau | Table Trac vs. MGM China Holdings |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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