Correlation Between Grupo Sports and Wynn Resorts
Can any of the company-specific risk be diversified away by investing in both Grupo Sports 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 Grupo Sports and Wynn Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Sports World and Wynn Resorts Limited, you can compare the effects of market volatilities on Grupo Sports 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 Grupo Sports with a short position of Wynn Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Sports and Wynn Resorts.
Diversification Opportunities for Grupo Sports and Wynn Resorts
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grupo and Wynn is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World 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 Grupo Sports 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 Grupo Sports World 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 Grupo Sports i.e., Grupo Sports and Wynn Resorts go up and down completely randomly.
Pair Corralation between Grupo Sports and Wynn Resorts
Assuming the 90 days trading horizon Grupo Sports World is expected to under-perform the Wynn Resorts. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Sports World is 1.56 times less risky than Wynn Resorts. The stock trades about -0.3 of its potential returns per unit of risk. The Wynn Resorts Limited is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 180,000 in Wynn Resorts Limited on October 25, 2024 and sell it today you would lose (2,000) from holding Wynn Resorts Limited or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Sports World vs. Wynn Resorts Limited
Performance |
| Timeline |
| Grupo Sports World |
| Wynn Resorts Limited |
Grupo Sports and Wynn Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Sports and Wynn Resorts
The main advantage of trading using opposite Grupo Sports and Wynn Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports 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.| Grupo Sports vs. Verizon Communications | Grupo Sports vs. First Republic Bank | Grupo Sports vs. Prudential Financial | Grupo Sports vs. New Oriental Education |
| Wynn Resorts vs. The Home Depot | Wynn Resorts vs. Cognizant Technology Solutions | Wynn Resorts vs. Grupo Sports World | Wynn Resorts vs. Deutsche Bank Aktiengesellschaft |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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