Correlation Between Nagacorp and Wynn Resorts
Can any of the company-specific risk be diversified away by investing in both Nagacorp 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 Nagacorp and Wynn Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nagacorp and Wynn Resorts Limited, you can compare the effects of market volatilities on Nagacorp 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 Nagacorp with a short position of Wynn Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nagacorp and Wynn Resorts.
Diversification Opportunities for Nagacorp and Wynn Resorts
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nagacorp and Wynn is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nagacorp 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 Nagacorp 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 Nagacorp 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 Nagacorp i.e., Nagacorp and Wynn Resorts go up and down completely randomly.
Pair Corralation between Nagacorp and Wynn Resorts
Assuming the 90 days horizon Nagacorp is expected to generate 2.18 times more return on investment than Wynn Resorts. However, Nagacorp is 2.18 times more volatile than Wynn Resorts Limited. It trades about 0.02 of its potential returns per unit of risk. Wynn Resorts Limited is currently generating about 0.03 per unit of risk. If you would invest 40.00 in Nagacorp on September 4, 2024 and sell it today you would lose (2.00) from holding Nagacorp or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nagacorp vs. Wynn Resorts Limited
Performance |
| Timeline |
| Nagacorp |
| Wynn Resorts Limited |
Nagacorp and Wynn Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nagacorp and Wynn Resorts
The main advantage of trading using opposite Nagacorp and Wynn Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nagacorp 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.| Nagacorp vs. Las Vegas Sands | Nagacorp vs. Sands China Ltd | Nagacorp vs. MGM Resorts International | Nagacorp vs. Wynn Resorts Limited |
| Wynn Resorts vs. MGM Resorts International | Wynn Resorts vs. Caesars Entertainment | Wynn Resorts vs. Melco Resorts Entertainment | Wynn Resorts vs. Penn National Gaming |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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