Correlation Between Wynn Resorts and Penn National
Can any of the company-specific risk be diversified away by investing in both Wynn Resorts and Penn National 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 Penn National 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 Penn National Gaming, you can compare the effects of market volatilities on Wynn Resorts and Penn National 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 Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Resorts and Penn National.
Diversification Opportunities for Wynn Resorts and Penn National
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wynn and Penn is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Resorts Limited and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National Gaming 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 Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of Wynn Resorts i.e., Wynn Resorts and Penn National go up and down completely randomly.
Pair Corralation between Wynn Resorts and Penn National
Given the investment horizon of 90 days Wynn Resorts Limited is expected to generate 0.62 times more return on investment than Penn National. However, Wynn Resorts Limited is 1.62 times less risky than Penn National. It trades about 0.02 of its potential returns per unit of risk. Penn National Gaming is currently generating about -0.01 per unit of risk. If you would invest 8,338 in Wynn Resorts Limited on August 28, 2024 and sell it today you would earn a total of 1,007 from holding Wynn Resorts Limited or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wynn Resorts Limited vs. Penn National Gaming
Performance |
| Timeline |
| Wynn Resorts Limited |
| Penn National Gaming |
Wynn Resorts and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wynn Resorts and Penn National
The main advantage of trading using opposite Wynn Resorts and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wynn Resorts position performs unexpectedly, Penn National 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 Penn National will offset losses from the drop in Penn National'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 |
| Penn National vs. DraftKings | Penn National vs. MGM Resorts International | Penn National vs. Caesars Entertainment | Penn National vs. Boyd 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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