Correlation Between SPDR SP and 983133AA7

Can any of the company-specific risk be diversified away by investing in both SPDR SP and 983133AA7 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 SPDR SP and 983133AA7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPDR SP Kensho and WYNN RESORTS FIN, you can compare the effects of market volatilities on SPDR SP and 983133AA7 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 SPDR SP with a short position of 983133AA7. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and 983133AA7.

Diversification Opportunities for SPDR SP and 983133AA7

0.4

Correlation Coefficient

SPDR SP  983133AA7

Very weak diversification

The 3 months correlation between SPDR and 983133AA7 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Kensho and WYNN RESORTS FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WYNN RESORTS FIN and SPDR SP 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 SPDR SP Kensho are associated (or correlated) with 983133AA7. 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 FIN has no effect on the direction of SPDR SP i.e., SPDR SP and 983133AA7 go up and down completely randomly.

Pair Corralation between SPDR SP and 983133AA7

Given the investment horizon of 90 days SPDR SP Kensho is expected to under-perform the 983133AA7. In addition to that, SPDR SP is 3.31 times more volatile than WYNN RESORTS FIN. It trades about -0.05 of its total potential returns per unit of risk. WYNN RESORTS FIN is currently generating about -0.08 per unit of volatility. If you would invest  9,586  in WYNN RESORTS FIN on December 25, 2024 and sell it today you would lose (185.00) from holding WYNN RESORTS FIN or give up 1.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	88.14%
Values	Daily Returns

SPDR SP Kensho  vs.  WYNN RESORTS FIN

SPDR SP Kensho

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR SP Kensho has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, SPDR SP is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

WYNN RESORTS FIN

Risk-Adjusted Performance

Very Weak

Over the last 90 days WYNN RESORTS FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 983133AA7 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR SP and 983133AA7

The main advantage of trading using opposite SPDR SP and 983133AA7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, 983133AA7 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 983133AA7 will offset losses from the drop in 983133AA7's long position.

The idea behind SPDR SP Kensho and WYNN RESORTS FIN 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.