Correlation Between SECURITAS and Wynn Macau
Can any of the company-specific risk be diversified away by investing in both SECURITAS 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 SECURITAS and Wynn Macau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SECURITAS B and Wynn Macau Limited, you can compare the effects of market volatilities on SECURITAS 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 SECURITAS with a short position of Wynn Macau. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECURITAS and Wynn Macau.
Diversification Opportunities for SECURITAS and Wynn Macau
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SECURITAS and Wynn is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SECURITAS B and Wynn Macau Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wynn Macau Limited and SECURITAS 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 SECURITAS B 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 Limited has no effect on the direction of SECURITAS i.e., SECURITAS and Wynn Macau go up and down completely randomly.
Pair Corralation between SECURITAS and Wynn Macau
Assuming the 90 days trading horizon SECURITAS B is expected to generate 0.22 times more return on investment than Wynn Macau. However, SECURITAS B is 4.47 times less risky than Wynn Macau. It trades about -0.23 of its potential returns per unit of risk. Wynn Macau Limited is currently generating about -0.13 per unit of risk. If you would invest 1,219 in SECURITAS B on October 8, 2024 and sell it today you would lose (25.00) from holding SECURITAS B or give up 2.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SECURITAS B vs. Wynn Macau Limited
Performance |
Timeline |
SECURITAS B |
Wynn Macau Limited |
SECURITAS and Wynn Macau Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SECURITAS and Wynn Macau
The main advantage of trading using opposite SECURITAS and Wynn Macau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECURITAS 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 SECURITAS B and Wynn Macau 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.Wynn Macau vs. GRUPO CARSO A1 | Wynn Macau vs. INTER CARS SA | Wynn Macau vs. Renesas Electronics | Wynn Macau vs. UET United Electronic |
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.
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