Correlation Between Wynn Resorts and Marriott International
Can any of the company-specific risk be diversified away by investing in both Wynn Resorts and Marriott International 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 Marriott International 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 Marriott International, you can compare the effects of market volatilities on Wynn Resorts and Marriott International 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 Marriott International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Resorts and Marriott International.
Diversification Opportunities for Wynn Resorts and Marriott International
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wynn and Marriott is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Resorts Limited and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International 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 Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of Wynn Resorts i.e., Wynn Resorts and Marriott International go up and down completely randomly.
Pair Corralation between Wynn Resorts and Marriott International
Given the investment horizon of 90 days Wynn Resorts Limited is expected to under-perform the Marriott International. In addition to that, Wynn Resorts is 1.88 times more volatile than Marriott International. It trades about -0.1 of its total potential returns per unit of risk. Marriott International is currently generating about 0.24 per unit of volatility. If you would invest 26,196 in Marriott International on August 27, 2024 and sell it today you would earn a total of 2,233 from holding Marriott International or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wynn Resorts Limited vs. Marriott International
Performance |
| Timeline |
| Wynn Resorts Limited |
| Marriott International |
Wynn Resorts and Marriott International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wynn Resorts and Marriott International
The main advantage of trading using opposite Wynn Resorts and Marriott International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wynn Resorts position performs unexpectedly, Marriott International 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 Marriott International will offset losses from the drop in Marriott International'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 |
| Marriott International vs. Hyatt Hotels | Marriott International vs. InterContinental Hotels Group | Marriott International vs. Choice Hotels International | Marriott International vs. Wyndham Hotels Resorts |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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