Correlation Between Monarch Casino and Full House

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

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

Diversification Opportunities for Monarch Casino and Full House

-0.37

Correlation Coefficient

Monarch Casino  Full House

Very good diversification

The 3 months correlation between Monarch and Full is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Monarch Casino Resort and Full House Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Full House Resorts and Monarch Casino 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 Monarch Casino Resort are associated (or correlated) with Full House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Full House Resorts has no effect on the direction of Monarch Casino i.e., Monarch Casino and Full House go up and down completely randomly.

Pair Corralation between Monarch Casino and Full House

Given the investment horizon of 90 days Monarch Casino Resort is expected to generate 0.66 times more return on investment than Full House. However, Monarch Casino Resort is 1.51 times less risky than Full House. It trades about 0.15 of its potential returns per unit of risk. Full House Resorts is currently generating about -0.03 per unit of risk. If you would invest  7,447  in Monarch Casino Resort on September 2, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Monarch Casino Resort  vs.  Full House Resorts

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 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Full House Resorts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Full House Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Full House is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Monarch Casino and Full House

The main advantage of trading using opposite Monarch Casino and Full House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monarch Casino position performs unexpectedly, Full House 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 Full House will offset losses from the drop in Full House's long position.

The idea behind Monarch Casino Resort and Full House Resorts 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.