Correlation Between Wynn Resorts and Capstone Copper
Can any of the company-specific risk be diversified away by investing in both Wynn Resorts and Capstone Copper 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 Resorts and Capstone Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wynn Resorts Limited and Capstone Copper Corp, you can compare the effects of market volatilities on Wynn Resorts and Capstone Copper 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 Resorts with a short position of Capstone Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Resorts and Capstone Copper.
Diversification Opportunities for Wynn Resorts and Capstone Copper
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wynn and Capstone is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Resorts Limited and Capstone Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Copper Corp and Wynn Resorts 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 Resorts Limited are associated (or correlated) with Capstone Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Copper Corp has no effect on the direction of Wynn Resorts i.e., Wynn Resorts and Capstone Copper go up and down completely randomly.
Pair Corralation between Wynn Resorts and Capstone Copper
Given the investment horizon of 90 days Wynn Resorts Limited is expected to generate 1.04 times more return on investment than Capstone Copper. However, Wynn Resorts is 1.04 times more volatile than Capstone Copper Corp. It trades about -0.01 of its potential returns per unit of risk. Capstone Copper Corp is currently generating about -0.04 per unit of risk. If you would invest 9,576 in Wynn Resorts Limited on September 1, 2024 and sell it today you would lose (138.00) from holding Wynn Resorts Limited or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wynn Resorts Limited vs. Capstone Copper Corp
Performance |
| Timeline |
| Wynn Resorts Limited |
| Capstone Copper Corp |
Wynn Resorts and Capstone Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wynn Resorts and Capstone Copper
The main advantage of trading using opposite Wynn Resorts and Capstone Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wynn Resorts position performs unexpectedly, Capstone Copper 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 Capstone Copper will offset losses from the drop in Capstone Copper's long position.| Wynn Resorts vs. MGM Resorts International | Wynn Resorts vs. Caesars Entertainment | Wynn Resorts vs. Melco Resorts Entertainment | Wynn Resorts vs. Penn National Gaming |
| Capstone Copper vs. Palantir Technologies Class | Capstone Copper vs. Scottie Resources Corp | Capstone Copper vs. FactSet Research Systems | Capstone Copper vs. Empire State Realty |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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