Correlation Between Ming Le and Wynn Resorts
Can any of the company-specific risk be diversified away by investing in both Ming Le 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 Ming Le and Wynn Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Le Sports and Wynn Resorts Limited, you can compare the effects of market volatilities on Ming Le 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 Ming Le with a short position of Wynn Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and Wynn Resorts.
Diversification Opportunities for Ming Le and Wynn Resorts
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ming and Wynn is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports 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 Ming Le 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 Ming Le Sports 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 Ming Le i.e., Ming Le and Wynn Resorts go up and down completely randomly.
Pair Corralation between Ming Le and Wynn Resorts
Assuming the 90 days trading horizon Ming Le is expected to generate 1.22 times less return on investment than Wynn Resorts. In addition to that, Ming Le is 1.04 times more volatile than Wynn Resorts Limited. It trades about 0.02 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 7,965 in Wynn Resorts Limited on September 3, 2024 and sell it today you would earn a total of 932.00 from holding Wynn Resorts Limited or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ming Le Sports vs. Wynn Resorts Limited
Performance |
| Timeline |
| Ming Le Sports |
| Wynn Resorts Limited |
Ming Le and Wynn Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ming Le and Wynn Resorts
The main advantage of trading using opposite Ming Le and Wynn Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le 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.| Ming Le vs. Sqs Software Quality | Ming Le vs. Burlington Stores | Ming Le vs. VITEC SOFTWARE GROUP | Ming Le vs. Take Two Interactive Software |
| Wynn Resorts vs. Consolidated Communications Holdings | Wynn Resorts vs. National Beverage Corp | Wynn Resorts vs. MAVEN WIRELESS SWEDEN | Wynn Resorts vs. T MOBILE INCDL 00001 |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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