Correlation Between Everi Holdings and Monarch Casino

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

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

Diversification Opportunities for Everi Holdings and Monarch Casino

0.77

Correlation Coefficient

Everi Holdings  Monarch Casino

Poor diversification

The 3 months correlation between Everi and Monarch is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Everi 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 Everi Holdings 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 Everi 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 Everi Holdings i.e., Everi Holdings and Monarch Casino go up and down completely randomly.

Pair Corralation between Everi Holdings and Monarch Casino

Given the investment horizon of 90 days Everi Holdings is expected to generate 3.87 times less return on investment than Monarch Casino. But when comparing it to its historical volatility, Everi Holdings is 7.42 times less risky than Monarch Casino. It trades about 0.29 of its potential returns per unit of risk. Monarch Casino Resort is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  7,447  in Monarch Casino Resort on September 1, 2024 and sell it today you would earn a total of  954.00  from holding Monarch Casino Resort or generate 12.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Everi Holdings  vs.  Monarch Casino Resort

Everi Holdings

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Everi Holdings are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Everi Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Monarch Casino Resort

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monarch Casino Resort are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Monarch Casino demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Everi Holdings and Monarch Casino

The main advantage of trading using opposite Everi Holdings and Monarch Casino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everi Holdings 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 Everi 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.