Correlation Between MGM Resorts and Netcompany Group
Can any of the company-specific risk be diversified away by investing in both MGM Resorts and Netcompany Group 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 MGM Resorts and Netcompany Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGM Resorts International and Netcompany Group AS, you can compare the effects of market volatilities on MGM Resorts and Netcompany Group 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 MGM Resorts with a short position of Netcompany Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGM Resorts and Netcompany Group.
Diversification Opportunities for MGM Resorts and Netcompany Group
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MGM and Netcompany is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding MGM Resorts International and Netcompany Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcompany Group and MGM Resorts 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 MGM Resorts International are associated (or correlated) with Netcompany Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcompany Group has no effect on the direction of MGM Resorts i.e., MGM Resorts and Netcompany Group go up and down completely randomly.
Pair Corralation between MGM Resorts and Netcompany Group
Considering the 90-day investment horizon MGM Resorts International is expected to generate 1.09 times more return on investment than Netcompany Group. However, MGM Resorts is 1.09 times more volatile than Netcompany Group AS. It trades about -0.13 of its potential returns per unit of risk. Netcompany Group AS is currently generating about -0.34 per unit of risk. If you would invest 4,461 in MGM Resorts International on January 20, 2024 and sell it today you would lose (257.00) from holding MGM Resorts International or give up 5.76% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 90.91% |
Values | Daily Returns |
MGM Resorts International vs. Netcompany Group AS
Performance |
Timeline |
MGM Resorts International |
Netcompany Group |
MGM Resorts and Netcompany Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MGM Resorts and Netcompany Group
The main advantage of trading using opposite MGM Resorts and Netcompany Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGM Resorts position performs unexpectedly, Netcompany Group 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 Netcompany Group will offset losses from the drop in Netcompany Group's long position.MGM Resorts vs. Wynn Resorts Limited | MGM Resorts vs. Caesars Entertainment | MGM Resorts vs. Melco Resorts Entertainment | MGM Resorts vs. Penn National Gaming |
Netcompany Group vs. Penneo AS | Netcompany Group vs. Bactiquant AS | Netcompany Group vs. cBrain AS | Netcompany Group vs. FOM Technologies AS |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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