Correlation Between Hilton Grand and MGM Resorts
Can any of the company-specific risk be diversified away by investing in both Hilton Grand and MGM Resorts 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 Hilton Grand and MGM Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilton Grand Vacations and MGM Resorts International, you can compare the effects of market volatilities on Hilton Grand and MGM Resorts 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 Hilton Grand with a short position of MGM Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Grand and MGM Resorts.
Diversification Opportunities for Hilton Grand and MGM Resorts
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hilton and MGM is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Grand Vacations and MGM Resorts International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGM Resorts International and Hilton Grand 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 Hilton Grand Vacations are associated (or correlated) with MGM Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGM Resorts International has no effect on the direction of Hilton Grand i.e., Hilton Grand and MGM Resorts go up and down completely randomly.
Pair Corralation between Hilton Grand and MGM Resorts
Considering the 90-day investment horizon Hilton Grand Vacations is expected to generate 0.83 times more return on investment than MGM Resorts. However, Hilton Grand Vacations is 1.21 times less risky than MGM Resorts. It trades about -0.12 of its potential returns per unit of risk. MGM Resorts International is currently generating about -0.24 per unit of risk. If you would invest 4,519 in Hilton Grand Vacations on February 4, 2024 and sell it today you would lose (203.00) from holding Hilton Grand Vacations or give up 4.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hilton Grand Vacations vs. MGM Resorts International
Performance |
Timeline |
Hilton Grand Vacations |
MGM Resorts International |
Hilton Grand and MGM Resorts Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hilton Grand and MGM Resorts
The main advantage of trading using opposite Hilton Grand and MGM Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Grand position performs unexpectedly, MGM Resorts 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 MGM Resorts will offset losses from the drop in MGM Resorts' long position.Hilton Grand vs. Revelation Biosciences | Hilton Grand vs. SHF Holdings | Hilton Grand vs. Aquagold International | Hilton Grand vs. Morningstar Unconstrained Allocation |
MGM Resorts vs. Revelation Biosciences | MGM Resorts vs. SHF Holdings | MGM Resorts vs. Aquagold International | MGM Resorts vs. Morningstar Unconstrained Allocation |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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