Correlation Between Wynn Macau and Red Rock
Can any of the company-specific risk be diversified away by investing in both Wynn Macau and Red Rock 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 Wynn Macau and Red Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wynn Macau and Red Rock Resorts, you can compare the effects of market volatilities on Wynn Macau and Red Rock 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 Wynn Macau with a short position of Red Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Macau and Red Rock.
Diversification Opportunities for Wynn Macau and Red Rock
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wynn and Red is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Macau and Red Rock Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Rock Resorts and Wynn Macau 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 Wynn Macau are associated (or correlated) with Red Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Rock Resorts has no effect on the direction of Wynn Macau i.e., Wynn Macau and Red Rock go up and down completely randomly.
Pair Corralation between Wynn Macau and Red Rock
Assuming the 90 days horizon Wynn Macau is expected to under-perform the Red Rock. But the pink sheet apears to be less risky and, when comparing its historical volatility, Wynn Macau is 1.2 times less risky than Red Rock. The pink sheet trades about -0.27 of its potential returns per unit of risk. The Red Rock Resorts is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 5,417 in Red Rock Resorts on August 29, 2024 and sell it today you would lose (442.00) from holding Red Rock Resorts or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wynn Macau vs. Red Rock Resorts
Performance |
| Timeline |
| Wynn Macau |
| Red Rock Resorts |
Wynn Macau and Red Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wynn Macau and Red Rock
The main advantage of trading using opposite Wynn Macau and Red Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wynn Macau position performs unexpectedly, Red Rock 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 Red Rock will offset losses from the drop in Red Rock's long position.| Wynn Macau vs. Studio City International | Wynn Macau vs. Monarch Casino Resort | Wynn Macau vs. Playa Hotels Resorts | Wynn Macau vs. Las Vegas Sands |
| Red Rock vs. Golden Entertainment | Red Rock vs. Century Casinos | Red Rock vs. Studio City International | Red Rock vs. Ballys Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |