Correlation Between Thai Beverage and Wynn Resorts

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

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

Diversification Opportunities for Thai Beverage and Wynn Resorts

0.18

Correlation Coefficient

Thai Beverage  Wynn Resorts

Average diversification

The 3 months correlation between Thai and Wynn is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Wynn Resorts Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wynn Resorts Limited and Thai Beverage 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 Thai Beverage Public are associated (or correlated) with Wynn Resorts. 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 Limited has no effect on the direction of Thai Beverage i.e., Thai Beverage and Wynn Resorts go up and down completely randomly.

Pair Corralation between Thai Beverage and Wynn Resorts

Assuming the 90 days horizon Thai Beverage Public is expected to generate 2.95 times more return on investment than Wynn Resorts. However, Thai Beverage is 2.95 times more volatile than Wynn Resorts Limited. It trades about 0.02 of its potential returns per unit of risk. Wynn Resorts Limited is currently generating about -0.08 per unit of risk. If you would invest  37.00  in Thai Beverage Public on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Thai Beverage Public or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Thai Beverage Public  vs.  Wynn Resorts Limited

Thai Beverage Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Beverage Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Thai Beverage may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Wynn Resorts Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wynn Resorts Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Thai Beverage and Wynn Resorts

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

The idea behind Thai Beverage Public and Wynn Resorts 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.