Correlation Between PlayAGS and Wynn Resorts

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

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

Diversification Opportunities for PlayAGS and Wynn Resorts

0.71

Correlation Coefficient

PlayAGS  Wynn Resorts

Poor diversification

The 3 months correlation between PlayAGS and Wynn is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS 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 PlayAGS 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 PlayAGS 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 PlayAGS i.e., PlayAGS and Wynn Resorts go up and down completely randomly.

Pair Corralation between PlayAGS and Wynn Resorts

Considering the 90-day investment horizon PlayAGS is expected to generate 1.53 times more return on investment than Wynn Resorts. However, PlayAGS is 1.53 times more volatile than Wynn Resorts Limited. It trades about 0.07 of its potential returns per unit of risk. Wynn Resorts Limited is currently generating about 0.02 per unit of risk. If you would invest  510.00  in PlayAGS on August 31, 2024 and sell it today you would earn a total of  652.00  from holding PlayAGS or generate 127.84% return on investment over 90 days.

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

PlayAGS  vs.  Wynn Resorts Limited

PlayAGS

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PlayAGS are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, PlayAGS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Wynn Resorts Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wynn Resorts Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Wynn Resorts displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PlayAGS and Wynn Resorts

The main advantage of trading using opposite PlayAGS and Wynn Resorts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayAGS 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 PlayAGS 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.