Correlation Between Wynn Resorts and Entain Plc
Can any of the company-specific risk be diversified away by investing in both Wynn Resorts and Entain Plc 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 Entain Plc 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 Entain Plc, you can compare the effects of market volatilities on Wynn Resorts and Entain Plc 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 Entain Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Resorts and Entain Plc.
Diversification Opportunities for Wynn Resorts and Entain Plc
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wynn and Entain is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Resorts Limited and Entain Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entain Plc 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 Entain Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entain Plc has no effect on the direction of Wynn Resorts i.e., Wynn Resorts and Entain Plc go up and down completely randomly.
Pair Corralation between Wynn Resorts and Entain Plc
Assuming the 90 days horizon Wynn Resorts Limited is expected to generate 0.45 times more return on investment than Entain Plc. However, Wynn Resorts Limited is 2.22 times less risky than Entain Plc. It trades about -0.12 of its potential returns per unit of risk. Entain Plc is currently generating about -0.13 per unit of risk. If you would invest 8,513 in Wynn Resorts Limited on October 20, 2024 and sell it today you would lose (262.00) from holding Wynn Resorts Limited or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wynn Resorts Limited vs. Entain Plc
Performance |
| Timeline |
| Wynn Resorts Limited |
| Entain Plc |
Wynn Resorts and Entain Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wynn Resorts and Entain Plc
The main advantage of trading using opposite Wynn Resorts and Entain Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wynn Resorts position performs unexpectedly, Entain Plc 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 Entain Plc will offset losses from the drop in Entain Plc's long position.| Wynn Resorts vs. Las Vegas Sands | Wynn Resorts vs. Galaxy Entertainment Group | Wynn Resorts vs. Sands China | Wynn Resorts vs. MGM Resorts International |
| Entain Plc vs. Las Vegas Sands | Entain Plc vs. Galaxy Entertainment Group | Entain Plc vs. Sands China | Entain Plc vs. MGM Resorts International |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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