Correlation Between 983133AA7 and Hawkins

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

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

Diversification Opportunities for 983133AA7 and Hawkins

0.53

Correlation Coefficient

983133AA7  Hawkins

Very weak diversification

The 3 months correlation between 983133AA7 and Hawkins is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding WYNN RESORTS FIN and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins and 983133AA7 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 RESORTS FIN are associated (or correlated) with Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of 983133AA7 i.e., 983133AA7 and Hawkins go up and down completely randomly.

Pair Corralation between 983133AA7 and Hawkins

Assuming the 90 days trading horizon WYNN RESORTS FIN is expected to generate 0.1 times more return on investment than Hawkins. However, WYNN RESORTS FIN is 9.66 times less risky than Hawkins. It trades about -0.09 of its potential returns per unit of risk. Hawkins is currently generating about -0.02 per unit of risk. If you would invest  9,710  in WYNN RESORTS FIN on October 23, 2024 and sell it today you would lose (142.00) from holding WYNN RESORTS FIN or give up 1.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	91.67%
Values	Daily Returns

WYNN RESORTS FIN  vs.  Hawkins

WYNN RESORTS FIN

Risk-Adjusted Performance

0 of 100

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 newest stock price disturbance, may contribute to short-term losses for the investors.

Hawkins

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hawkins has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking signals, Hawkins is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with 983133AA7 and Hawkins

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

The idea behind WYNN RESORTS FIN and Hawkins 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.