Correlation Between Century Casinos and Wynn Macau

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

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

Diversification Opportunities for Century Casinos and Wynn Macau

0.16

Correlation Coefficient

Century Casinos  Wynn Macau

Average diversification

The 3 months correlation between Century and Wynn is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Century Casinos and Wynn Macau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wynn Macau and Century Casinos 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 Century Casinos are associated (or correlated) with Wynn Macau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wynn Macau has no effect on the direction of Century Casinos i.e., Century Casinos and Wynn Macau go up and down completely randomly.

Pair Corralation between Century Casinos and Wynn Macau

Given the investment horizon of 90 days Century Casinos is expected to under-perform the Wynn Macau. In addition to that, Century Casinos is 1.01 times more volatile than Wynn Macau. It trades about -0.17 of its total potential returns per unit of risk. Wynn Macau is currently generating about 0.06 per unit of volatility. If you would invest  65.00  in Wynn Macau on December 28, 2024 and sell it today you would earn a total of  7.00  from holding Wynn Macau or generate 10.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Century Casinos  vs.  Wynn Macau

Century Casinos

Risk-Adjusted Performance

Very Weak

Over the last 90 days Century Casinos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Wynn Macau

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wynn Macau are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Wynn Macau reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Century Casinos and Wynn Macau

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

The idea behind Century Casinos and Wynn Macau 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.