Correlation Between Wynn Macau and Flowers Foods
Can any of the company-specific risk be diversified away by investing in both Wynn Macau and Flowers Foods 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 Macau and Flowers Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wynn Macau Limited and Flowers Foods, you can compare the effects of market volatilities on Wynn Macau and Flowers Foods 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 Macau with a short position of Flowers Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Macau and Flowers Foods.
Diversification Opportunities for Wynn Macau and Flowers Foods
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wynn and Flowers is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Macau Limited and Flowers Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flowers Foods and Wynn Macau 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 Macau Limited are associated (or correlated) with Flowers Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flowers Foods has no effect on the direction of Wynn Macau i.e., Wynn Macau and Flowers Foods go up and down completely randomly.
Pair Corralation between Wynn Macau and Flowers Foods
Assuming the 90 days horizon Wynn Macau Limited is expected to generate 1.64 times more return on investment than Flowers Foods. However, Wynn Macau is 1.64 times more volatile than Flowers Foods. It trades about -0.01 of its potential returns per unit of risk. Flowers Foods is currently generating about -0.12 per unit of risk. If you would invest 68.00 in Wynn Macau Limited on December 20, 2024 and sell it today you would lose (3.00) from holding Wynn Macau Limited or give up 4.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Wynn Macau Limited vs. Flowers Foods
Performance |
Timeline |
Wynn Macau Limited |
Flowers Foods |
Wynn Macau and Flowers Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wynn Macau and Flowers Foods
The main advantage of trading using opposite Wynn Macau and Flowers Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wynn Macau position performs unexpectedly, Flowers Foods 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 Flowers Foods will offset losses from the drop in Flowers Foods' long position.Wynn Macau vs. Investment Latour AB | Wynn Macau vs. AGNC INVESTMENT | Wynn Macau vs. Medical Properties Trust | Wynn Macau vs. Gladstone 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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