Correlation Between SkyCity Entertainment and Wynn Macau
Can any of the company-specific risk be diversified away by investing in both SkyCity Entertainment and Wynn Macau 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 SkyCity Entertainment and Wynn Macau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SkyCity Entertainment Group and Wynn Macau, you can compare the effects of market volatilities on SkyCity Entertainment and Wynn Macau 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 SkyCity Entertainment with a short position of Wynn Macau. Check out your portfolio center. Please also check ongoing floating volatility patterns of SkyCity Entertainment and Wynn Macau.
Diversification Opportunities for SkyCity Entertainment and Wynn Macau
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between SkyCity and Wynn is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SkyCity Entertainment Group and Wynn Macau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wynn Macau and SkyCity Entertainment 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 SkyCity Entertainment Group are associated (or correlated) with Wynn Macau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wynn Macau has no effect on the direction of SkyCity Entertainment i.e., SkyCity Entertainment and Wynn Macau go up and down completely randomly.
Pair Corralation between SkyCity Entertainment and Wynn Macau
Assuming the 90 days horizon SkyCity Entertainment Group is expected to under-perform the Wynn Macau. But the pink sheet apears to be less risky and, when comparing its historical volatility, SkyCity Entertainment Group is 1.27 times less risky than Wynn Macau. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Wynn Macau is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 98.00 in Wynn Macau on August 25, 2024 and sell it today you would lose (25.00) from holding Wynn Macau or give up 25.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.46% |
| Values | Daily Returns |
SkyCity Entertainment Group vs. Wynn Macau
Performance |
| Timeline |
| SkyCity Entertainment |
| Wynn Macau |
SkyCity Entertainment and Wynn Macau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SkyCity Entertainment and Wynn Macau
The main advantage of trading using opposite SkyCity Entertainment and Wynn Macau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SkyCity Entertainment position performs unexpectedly, Wynn Macau 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 Macau will offset losses from the drop in Wynn Macau's long position.| SkyCity Entertainment vs. Nagacorp | SkyCity Entertainment vs. Wynn Macau | SkyCity Entertainment vs. MGM China Holdings | SkyCity Entertainment vs. Table Trac |
| Wynn Macau vs. Banyan Tree Holdings | Wynn Macau vs. Nagacorp | Wynn Macau vs. MGM China Holdings | Wynn Macau vs. Table Trac |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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