Correlation Between Sands China and Wynn Resorts
Can any of the company-specific risk be diversified away by investing in both Sands China and Wynn 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 Sands China and Wynn Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sands China and Wynn Resorts Limited, you can compare the effects of market volatilities on Sands China and Wynn 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 Sands China with a short position of Wynn Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sands China and Wynn Resorts.
Diversification Opportunities for Sands China and Wynn Resorts
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sands and Wynn is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sands China and Wynn Resorts Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wynn Resorts Limited and Sands China 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 Sands China are associated (or correlated) with Wynn Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wynn Resorts Limited has no effect on the direction of Sands China i.e., Sands China and Wynn Resorts go up and down completely randomly.
Pair Corralation between Sands China and Wynn Resorts
Assuming the 90 days trading horizon Sands China is expected to under-perform the Wynn Resorts. In addition to that, Sands China is 1.48 times more volatile than Wynn Resorts Limited. It trades about 0.0 of its total potential returns per unit of risk. Wynn Resorts Limited is currently generating about 0.02 per unit of volatility. If you would invest 8,000 in Wynn Resorts Limited on September 2, 2024 and sell it today you would earn a total of 897.00 from holding Wynn Resorts Limited or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sands China vs. Wynn Resorts Limited
Performance |
| Timeline |
| Sands China |
| Wynn Resorts Limited |
Sands China and Wynn Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sands China and Wynn Resorts
The main advantage of trading using opposite Sands China and Wynn Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sands China position performs unexpectedly, Wynn 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 Wynn Resorts will offset losses from the drop in Wynn Resorts' long position.| Sands China vs. ORMAT TECHNOLOGIES | Sands China vs. GLG LIFE TECH | Sands China vs. AAC TECHNOLOGHLDGADR | Sands China vs. AEON STORES |
| Wynn Resorts vs. Superior Plus Corp | Wynn Resorts vs. NMI Holdings | Wynn Resorts vs. Origin Agritech | Wynn Resorts vs. SIVERS SEMICONDUCTORS AB |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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