Correlation Between Wynn Macau and Monarch Casino
Can any of the company-specific risk be diversified away by investing in both Wynn Macau and Monarch Casino 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 Wynn Macau and Monarch Casino into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wynn Macau and Monarch Casino Resort, you can compare the effects of market volatilities on Wynn Macau and Monarch Casino 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 Wynn Macau with a short position of Monarch Casino. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Macau and Monarch Casino.
Diversification Opportunities for Wynn Macau and Monarch Casino
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wynn and Monarch is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Macau and Monarch Casino Resort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monarch Casino Resort and Wynn Macau 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 Wynn Macau are associated (or correlated) with Monarch Casino. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monarch Casino Resort has no effect on the direction of Wynn Macau i.e., Wynn Macau and Monarch Casino go up and down completely randomly.
Pair Corralation between Wynn Macau and Monarch Casino
Assuming the 90 days horizon Wynn Macau is expected to under-perform the Monarch Casino. In addition to that, Wynn Macau is 2.2 times more volatile than Monarch Casino Resort. It trades about -0.27 of its total potential returns per unit of risk. Monarch Casino Resort is currently generating about 0.38 per unit of volatility. If you would invest 7,912 in Monarch Casino Resort on August 29, 2024 and sell it today you would earn a total of 657.00 from holding Monarch Casino Resort or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wynn Macau vs. Monarch Casino Resort
Performance |
| Timeline |
| Wynn Macau |
| Monarch Casino Resort |
Wynn Macau and Monarch Casino Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wynn Macau and Monarch Casino
The main advantage of trading using opposite Wynn Macau and Monarch Casino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wynn Macau position performs unexpectedly, Monarch Casino 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 Monarch Casino will offset losses from the drop in Monarch Casino's long position.| Wynn Macau vs. Studio City International | Wynn Macau vs. Monarch Casino Resort | Wynn Macau vs. Playa Hotels Resorts | Wynn Macau vs. Las Vegas Sands |
| Monarch Casino vs. Red Rock Resorts | Monarch Casino vs. Full House Resorts | Monarch Casino vs. Ballys Corp | Monarch Casino vs. Golden Entertainment |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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