Correlation Between Monarch Casino and Las Vegas

Can any of the company-specific risk be diversified away by investing in both Monarch Casino and Las Vegas 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 Las Vegas 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 Las Vegas Sands, you can compare the effects of market volatilities on Monarch Casino and Las Vegas 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 Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monarch Casino and Las Vegas.

Diversification Opportunities for Monarch Casino and Las Vegas

-0.4

Correlation Coefficient

Monarch Casino  Las Vegas

Very good diversification

The 3 months correlation between Monarch and Las is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Monarch Casino Resort and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands 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 Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of Monarch Casino i.e., Monarch Casino and Las Vegas go up and down completely randomly.

Pair Corralation between Monarch Casino and Las Vegas

Given the investment horizon of 90 days Monarch Casino Resort is expected to generate 0.7 times more return on investment than Las Vegas. However, Monarch Casino Resort is 1.42 times less risky than Las Vegas. It trades about 0.08 of its potential returns per unit of risk. Las Vegas Sands is currently generating about -0.11 per unit of risk. 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

Monarch Casino Resort  vs.  Las Vegas Sands

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.

Las Vegas Sands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Las Vegas Sands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Monarch Casino and Las Vegas

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

The idea behind Monarch Casino Resort and Las Vegas Sands 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.