Correlation Between Banyan Tree and Monarch Casino

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

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

Diversification Opportunities for Banyan Tree and Monarch Casino

0.0

Correlation Coefficient

Banyan Tree  Monarch Casino

Pay attention - limited upside

The 3 months correlation between Banyan and Monarch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Banyan Tree Holdings 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 Banyan Tree 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 Banyan Tree Holdings 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 Banyan Tree i.e., Banyan Tree and Monarch Casino go up and down completely randomly.

Pair Corralation between Banyan Tree and Monarch Casino

If you would invest  8,668  in Monarch Casino Resort on December 4, 2024 and sell it today you would earn a total of  460.00  from holding Monarch Casino Resort or generate 5.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Banyan Tree Holdings  vs.  Monarch Casino Resort

Banyan Tree Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banyan Tree Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Banyan Tree is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Monarch Casino Resort

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Monarch Casino Resort are ranked lower than 4 (%) 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 April 2025.

Pair Trading with Banyan Tree and Monarch Casino

The main advantage of trading using opposite Banyan Tree and Monarch Casino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banyan Tree 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 Banyan Tree Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.