Correlation Between Wynn Resorts and MGM Resorts
Can any of the company-specific risk be diversified away by investing in both Wynn Resorts and MGM 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 Wynn Resorts and MGM Resorts 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 MGM Resorts International, you can compare the effects of market volatilities on Wynn Resorts and MGM 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 Wynn Resorts with a short position of MGM Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Resorts and MGM Resorts.
Diversification Opportunities for Wynn Resorts and MGM Resorts
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wynn and MGM is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Resorts Limited and MGM Resorts International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGM Resorts 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 MGM Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGM Resorts International has no effect on the direction of Wynn Resorts i.e., Wynn Resorts and MGM Resorts go up and down completely randomly.
Pair Corralation between Wynn Resorts and MGM Resorts
Given the investment horizon of 90 days Wynn Resorts Limited is expected to generate 0.94 times more return on investment than MGM Resorts. However, Wynn Resorts Limited is 1.07 times less risky than MGM Resorts. It trades about -0.01 of its potential returns per unit of risk. MGM Resorts International is currently generating about -0.01 per unit of risk. If you would invest 9,752 in Wynn Resorts Limited on October 20, 2024 and sell it today you would lose (1,285) from holding Wynn Resorts Limited or give up 13.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wynn Resorts Limited vs. MGM Resorts International
Performance |
| Timeline |
| Wynn Resorts Limited |
| MGM Resorts International |
Wynn Resorts and MGM Resorts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wynn Resorts and MGM Resorts
The main advantage of trading using opposite Wynn Resorts and MGM Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wynn Resorts position performs unexpectedly, MGM 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 MGM Resorts will offset losses from the drop in MGM Resorts' 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 |
| MGM Resorts vs. Wynn Resorts Limited | MGM Resorts vs. Caesars Entertainment | MGM Resorts vs. Melco Resorts Entertainment | MGM Resorts vs. Penn National Gaming |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |