Correlation Between Ballys Corp and Monarch Casino

Can any of the company-specific risk be diversified away by investing in both Ballys Corp 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 Ballys Corp and Monarch Casino into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ballys Corp and Monarch Casino Resort, you can compare the effects of market volatilities on Ballys Corp 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 Ballys Corp with a short position of Monarch Casino. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ballys Corp and Monarch Casino.

Diversification Opportunities for Ballys Corp and Monarch Casino

-0.54

Correlation Coefficient

Ballys Corp  Monarch Casino

Excellent diversification

The 3 months correlation between Ballys and Monarch is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ballys Corp 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 Ballys Corp 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 Ballys Corp 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 Ballys Corp i.e., Ballys Corp and Monarch Casino go up and down completely randomly.

Pair Corralation between Ballys Corp and Monarch Casino

Given the investment horizon of 90 days Ballys Corp is expected to under-perform the Monarch Casino. In addition to that, Ballys Corp is 1.73 times more volatile than Monarch Casino Resort. It trades about -0.07 of its total potential returns per unit of risk. Monarch Casino Resort is currently generating about 0.08 per unit of volatility. If you would invest  8,401  in Monarch Casino Resort on November 28, 2024 and sell it today you would earn a total of  660.00  from holding Monarch Casino Resort or generate 7.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ballys Corp  vs.  Monarch Casino Resort

Ballys Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ballys Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Monarch Casino Resort

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Monarch Casino Resort are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Monarch Casino may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Ballys Corp and Monarch Casino

The main advantage of trading using opposite Ballys Corp and Monarch Casino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ballys Corp 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.

The idea behind Ballys Corp and Monarch Casino Resort pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.