Correlation Between Stantec and Monarch Casino

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

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

Diversification Opportunities for Stantec and Monarch Casino

0.64

Correlation Coefficient

Stantec  Monarch Casino

Poor diversification

The 3 months correlation between Stantec and Monarch is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Stantec 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 Stantec 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 Stantec 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 Stantec i.e., Stantec and Monarch Casino go up and down completely randomly.

Pair Corralation between Stantec and Monarch Casino

Considering the 90-day investment horizon Stantec is expected to generate 3.37 times less return on investment than Monarch Casino. But when comparing it to its historical volatility, Stantec is 1.06 times less risky than Monarch Casino. It trades about 0.06 of its potential returns per unit of risk. Monarch Casino Resort is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  7,471  in Monarch Casino Resort on September 16, 2024 and sell it today you would earn a total of  1,253  from holding Monarch Casino Resort or generate 16.77% return on investment over 90 days.

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

Stantec  vs.  Monarch Casino Resort

Stantec

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stantec are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Stantec is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Monarch Casino Resort

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monarch Casino Resort are ranked lower than 14 (%) 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 Stantec and Monarch Casino

The main advantage of trading using opposite Stantec and Monarch Casino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stantec 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 Stantec 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.