Correlation Between Wynn Macau and SECURITAS

Can any of the company-specific risk be diversified away by investing in both Wynn Macau and SECURITAS 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 SECURITAS 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 SECURITAS B , you can compare the effects of market volatilities on Wynn Macau and SECURITAS 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 SECURITAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wynn Macau and SECURITAS.

Diversification Opportunities for Wynn Macau and SECURITAS

-0.05

Correlation Coefficient

Wynn Macau  SECURITAS

Good diversification

The 3 months correlation between Wynn and SECURITAS is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Macau Limited and SECURITAS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURITAS B 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 SECURITAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECURITAS B has no effect on the direction of Wynn Macau i.e., Wynn Macau and SECURITAS go up and down completely randomly.

Pair Corralation between Wynn Macau and SECURITAS

Assuming the 90 days horizon Wynn Macau is expected to generate 16.72 times less return on investment than SECURITAS. In addition to that, Wynn Macau is 1.25 times more volatile than SECURITAS B . It trades about 0.01 of its total potential returns per unit of risk. SECURITAS B is currently generating about 0.11 per unit of volatility. If you would invest  340.00  in SECURITAS B on October 23, 2024 and sell it today you would earn a total of  843.00  from holding SECURITAS B or generate 247.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Wynn Macau Limited  vs.  SECURITAS B

Wynn Macau Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wynn Macau Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Wynn Macau is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

SECURITAS B

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SECURITAS B are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, SECURITAS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wynn Macau and SECURITAS

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

The idea behind Wynn Macau Limited and SECURITAS B 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.