Correlation Between MAVEN WIRELESS and Wynn Resorts

Can any of the company-specific risk be diversified away by investing in both MAVEN WIRELESS and Wynn 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 MAVEN WIRELESS and Wynn Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MAVEN WIRELESS SWEDEN and Wynn Resorts Limited, you can compare the effects of market volatilities on MAVEN WIRELESS and Wynn 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 MAVEN WIRELESS with a short position of Wynn Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAVEN WIRELESS and Wynn Resorts.

Diversification Opportunities for MAVEN WIRELESS and Wynn Resorts

-0.08

Correlation Coefficient

MAVEN WIRELESS  Wynn Resorts

Good diversification

The 3 months correlation between MAVEN and Wynn is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding MAVEN WIRELESS SWEDEN and Wynn Resorts Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wynn Resorts Limited and MAVEN WIRELESS 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 MAVEN WIRELESS SWEDEN are associated (or correlated) with Wynn Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wynn Resorts Limited has no effect on the direction of MAVEN WIRELESS i.e., MAVEN WIRELESS and Wynn Resorts go up and down completely randomly.

Pair Corralation between MAVEN WIRELESS and Wynn Resorts

Assuming the 90 days horizon MAVEN WIRELESS SWEDEN is expected to under-perform the Wynn Resorts. But the stock apears to be less risky and, when comparing its historical volatility, MAVEN WIRELESS SWEDEN is 1.13 times less risky than Wynn Resorts. The stock trades about -0.1 of its potential returns per unit of risk. The Wynn Resorts Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  6,834  in Wynn Resorts Limited on September 3, 2024 and sell it today you would earn a total of  2,063  from holding Wynn Resorts Limited or generate 30.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MAVEN WIRELESS SWEDEN  vs.  Wynn Resorts Limited

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAVEN WIRELESS SWEDEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Wynn Resorts Limited

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wynn Resorts Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Wynn Resorts reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MAVEN WIRELESS and Wynn Resorts

The main advantage of trading using opposite MAVEN WIRELESS and Wynn Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAVEN WIRELESS position performs unexpectedly, Wynn 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 Wynn Resorts will offset losses from the drop in Wynn Resorts' long position.

The idea behind MAVEN WIRELESS SWEDEN and Wynn Resorts Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Valuation module to check real value of public entities based on technical and fundamental data.